You've decided to be a serious investor!

That's nice to hear.Here are five ways to get you started.

1. Be consistent
Every month, make it a point to save a fixed sum. The key is to make savings a habit. Even if you only manage to save a few hundred rupees, don't let it worry you.

Preferably, set aside a fixed percentage of your salary. Remember, we are talking here of a monthly saving, not a yearly one. It could be 10% or 15% or 20% of what you earn. If you manage to save more, great!


2. Do an asset allocation
The perennial dilemma that faces every investor is how much of his/ her money should be invested in equity (shares and mutual funds that invest in the shares of companies) and debt (fixed return investments like bonds, fixed deposits, Public Provident Fund and post office schemes).

When you are young, you can safely invest the bulk of your savings in equity.

3. Diversify, diversify, diversify!

It's the best way to stabilise your finances.

To quote an often repeated cliché: don't put all your eggs in one basket.

Put some money in safe instruments like a bank fixed deposit or a post office saving scheme or bonds from a reliable financial institution.

Consider real estate. Then, there are mutual funds and stocks. Diversify even further within these categories.

4 Do your tax planning

Section 80C was introduced in the last budget (February 2005). Under this section, you can claim deductions from your income in certain investments.

# Provident Fund
# Public Provident Fund
# Life insurance premium
# Pension plans
# Equity Linked Saving Schemes of mutual funds
# Infrastructure bonds
# National Savings Certificate

5. Get a PAN

The taxman demands you get yourself a Permanent Account Number.

This is a unique 10-digit alphanumeric number (AABPS1205E, for example) that identifies and tracks an individual in the taxman's database.

# Virtually every money transaction will demand that you need a PAN: When you get a job
# When you file an income tax return
# When you open a bank account
# When you deposit cash of Rs 50,000 or more in a bank
# When you open a bank fixed deposit of Rs 50,000 or more
# When you open a post office deposit of Rs 50,000 or more
# When you buy/ sell shares and mutual funds
# When you buy/ sell property
# When you buy a vehicle
# When you take a loan: home/ personal/ other
# When you install a telephone (even a cell phone)
# When you pay in cash to hotels and restaurants against bills for an amount exceeding Rs 25,000 at any one time
# You also need to mention it in every transaction you have with the tax officials.