Today, everyone wants to invest money in the stock market, which is good. But the question is, how much money should you start with?

Most people in our country expect to achieve something big by investing only Rs 10,000-20,000 in the stock market. The reality is that you cannot achieve any significant financial goals by buying shares worth just Rs 10,000-20,000.

When you invest in the equity market, you become connected to it. Whether you invest Rs 10,000-20,000 or Rs 1-2 lakh or even more, you get involved in the market. You’ll likely check your portfolio at least once or twice a day to see how your shares are performing, whether they’re profitable or incurring losses. This means you start dedicating your valuable time to the market without reaping its full benefits.

How much money should you invest in the market?

Let’s understand this with an example. If you buy shares worth Rs 10,000-20,000 and those shares become multibaggers, your money doubles in two years. So, if you invested Rs 20,000, it would become Rs 40,000. Now, think about how much time you dedicated to the market for just Rs 20,000. You checked your portfolio daily, calculated profits and losses. You thought about that stock every day, and what did you get? Rs 40,000 after two years, and that’s not even guaranteed.

Therefore, if you believe you can achieve something significant by investing Rs 10,000-20,000 in the stock market, consider the current value of Rs 10,000-20,000 today. If a Rs 20,000 investment becomes Rs 40,000 after two years, it’s still not a large sum, and you’ve spent two years for it.

So, if you regularly monitor market movements, have experience, know where to make money, which stocks to buy, and when to sell, then invest enough money in the market so that it impacts your financial health. While people decide their investments based on their income, if someone dedicates their full time to the market, they should start investing with at least Rs 1 lakh, meaning build a portfolio of Rs 1 lakh.

This formula for stock market investment

If you build a portfolio of Rs 1 lakh, its formula should be 50:30:20, where Rs 50,000 should be invested in large-cap shares, Rs 30,000 in mid-cap shares, and Rs 20,000 in small-cap shares. In other words, the portfolio should be diversified. When you invest Rs 1 lakh in the market, your portfolio should contain shares of at least 10 companies, and you should review it at least once a month.

However, the investment perspective should be long-term; you should stay in the market for at least 5 years. Most importantly, you should not invest the entire amount at once but gradually.

When you invest around Rs 1 lakh in the market, some shares in your portfolio will become multibaggers after 10 years, which can give you significant returns. Investing in 10 different companies also diversifies the risk. After two or four years, your portfolio will start showing profits, and then you’ll become more interested in investing. While there’s no guarantee of how much money you’ll receive after 10 years, if you get a 20% return every year, you’ll build a substantial fund.

The harsh truth is that Rs 10,000-20,000 might be a small amount from an investment perspective, but for some people, it’s not easy to arrange even that. Of course, new investors don’t need a specific minimum amount to start investing in the stock market.

Avoid jumping into the equity market without information

If you want to learn about market investing, you can start with Rs 100. Buy one or two shares of a company. The most important thing is that there are risks in the stock market, so invest only as much as you are prepared to lose. The biggest advantage of starting with a small amount is that you’ll understand the market. You’ll experience trading, brokerage, and market fluctuations. This teaches you financial discipline.

On the other hand, if you have no experience and want to invest Rs 10,000-20,000 in the stock market, you can enter the market through mutual funds, which will be more profitable and less risky. Money can be lost in the equity market, but when you invest in mutual funds with the help of experts, the risk decreases. Initially, focus on blue-chip stocks, where the risk will be lower. Then, regularly study the market. If you are completely new, start with an SIP of Rs 500-1,000 initially. This is less risky and helps you gain a feel for the market.

(Note: Before investing in the stock market, always seek the help of a financial advisor.)

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