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How Much Money Do I Need to Start Investing?

The economic rise of the developed countries gave birth to a consumption-driven world in which People have started taking consumer loans not only for their necessities but also to fund their luxuries. It even became a trend among youngsters to borrow money to fund their trips. In all this, what took the back seat was the habit of regular savings and investments that our elders have always taught us. 

Surprisingly, the Covid-19 pandemic and the Russia-Ukraine war have done the balancing act, teaching us that investing money is the most crucial step toward a secure future. Not only do investments provide a safety net, but they also help you build your wealth.

However, budding investors always ask, “an investor needs how much money to start investing?” What’s the minimum amount you can start investing with? This blog aims to answer all your questions about starting your first investment.

What to do Before You Start Investing?

Here are 3 major things you should learn before investing your money.

  • Manage Your Debts Efficiently 

Who doesn’t like to earn more? But it can be disastrous to park your money in investments when you still have debts to repay. It takes time for the investments to provide returns. On the other hand, debts need to be repaid on the due dates, failing which, can attract penalties. 

If you invest the money before paying off your debts, you might suddenly find yourself in a cash crunch. Thus, it is better to clear your debts first.

  • Budget Your Monthly Expenses

While the word itself can have different meanings at micro and macro levels, budgeting for a household is fairly simple. You need to break your income into 3 different components, namely, essential expenses, luxuries, and savings. Suppose you earn Rs. 50,000 per month; here’s how experts suggest making a budget.

ParticularsMonthly IncomeEssential Expenditure: 50% of IncomeLuxury Expenses: 30% of IncomeSavings & Investments 20% of Income
AmountRs. 50,000Rs. 25,000Rs. 15,000Rs. 10,000

The idea is to decide the Learn how much money you need to become an investigator limit for your expenditures so that you can save and invest more money. Once you prepare your budget, you should always try to meet it and regularly save and invest the decided amount. 

  • Plan for Emergencies

There is another important aspect that the experts prescribe. It is to save some money as a buffer or emergency fund. This money can be very useful in unforeseen situations where it might be time-consuming to liquidate your investments. Ideally, you should maintain liquidity that can help you sustain your expenses for at least 6 months.

How Much Money is Needed to Start Investing?

Having discussed the prerequisites of starting your investments, let’s talk about the elephant in the room. How much money do you need to become an investor? If you are an Indian investor, some of your popular investment choices would be FDs, PPF, stock markets, P2P investments, etc. Here’s how much money you need to start investing in each of these investment opportunities.

  • Fixed Deposits: Rs. 1,000 – 5,000 (It can be higher depending on the bank or FI)
  • PPF Accounts: Rs. 100 for Opening Accounts (Deposit Rs. 500 every year)
  • Stocks: No minimum amount. You can even start investing with Rs. 10!
  • Mutual Funds: You can start a SIP with as low as Rs. 100 per month
  • Gold ETFs: You can purchase the paper gold equivalent of Rs. 1,000 (99.50% purity)
  • P2P Investments: Start P2P investments with LenDenClub in a modest way with the opportunity to get good returns at a relatively lower risk 

So, how much money do you need to start investing? From the above discussion, it is evident that you can start with almost anything. While there is no minimum limit for investing in stock markets, you can start small for most of the above investments. 

Things to Keep in Mind Before Investing

Now that you know how much money you need to start investing, are you ready to make your first investment? Well, not yet. Here are some things you should keep in mind before you set on to make your investments.

Identify Your Investing Goals 

It is by far one of the most important steps which many investors do not consider. You might invest in funding your children’s education or some event, in building a house or purchasing a car, go on a world tour, or simply grow your wealth. 

While there can be diverse investment goals, the time for which you invest your money, as well as your risk tolerance, depends on the type of investment objective. If you are saving for the future of your children, your risk tolerance can be low. At the same time, you can invest in the long term if you want to save money for your retirement.

Pick the Best Investment Opportunity

Based on your investment objective, risk tolerance, and the tenure of investment, you should choose the investment opportunity that suits you. If you can tolerate high risk, you should opt for investing in stock markets. On the other hand, if you are risk-averse, investments like fixed deposits can help you. Another popular investment opportunity is peer-to-peer lending. It is direct lending between individuals in exchange for monthly repayments. 

P2P platforms like LenDenClub provide an online marketplace where investors can register and start investing online within just a few clicks. With LenDenClub, you can earn up to 12% p.a. without facing any market risk. Because of robust borrower screening on 200+ data points, only creditworthy borrowers are listed on the portal, and the default rates faced by the P2P investors are as low as 3-4%. And, what’s more? Individuals, NRIs, and institutions can start their investment journeys with LenDenClub without worrying about the nuances of investing. LendenClub leverages AI-based filters for borrower shortlisting, and priority investments. All an investor has to do is sign up, complete the KYC, and update the borrower preference details. And, the investor is ready to go. 

Diversify a Small Portfolio

Every investment carries a degree of risk. Some investment opportunities carry low risk, others carry high risk. You can minimise the risk of losing your money by diversifying your investments. 

For Ex: The value of your stock investments is dependent on the fluctuation in market prices. Hence, it carries a high degree of risk but you can reduce this risk by including stocks from different sectors in your portfolio.

P2P investment with LenDenClub provides the best diversification options for you. You can simply distribute your money among various borrowers. Suppose you want to invest Rs. 10,000 on LenDenClub. Now you can distribute it as Rs. 500 each among 20 borrowers. This diversification and risk distribution capabilities of LenDenClub make it one of the popular investment avenues in India. 

Consistency is the Key

Investing consistently over a period of time is the best way to build a good corpus. Let’s take an example. Assuming that the rate of returns is 10% p.a., if you invest Rs. 10,000 every month for 10 years; here’s how your investment will grow.

Year1st Year5th Year10th Year
Opening BalanceRs. – Rs. 5,92,118Rs. 17,55,000
InvestmentRs. 1,20,000Rs. 1,20,000Rs. 1,20,000
Interest @ 10%Rs. 6,702.81Rs. 68,705Rs. 1,90,478
Closing BalanceRs. 1,26,702.81Rs. 7,80,824Rs. 20,65,520


Our main objective with this blog was to clarify how much you need to start investing. We hope that you have now understood that you can start investing even with a small amount and gradually increase your investments. 

By following all the steps listed in this blog and planning your investments accordingly and you can easily start investing. If you wish to try P2P investments, log on to the LenDenClub platform to enjoy high returns with great interest.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

© 2023 LenDenClub by Innofin Solutions Private Limited | CIN: U74999MH2015PTC266499


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