As a recent graduate with nearly zero savings, where should I start investing?

I hope you will soon have more savings!

But as you start to save, invest in this order –

1. Take life insurance. A simple term insurance. You may have few responsibilities today but you will tomorrow, and the best time to get it is now when you’re young and healthy. Lock in a low premium.
2. Start a PPF or NPS. Let it be small, the fact that it’s a tax benefit makes the effective return better than many others, plus it’s safer. Keeping increasing over time. Get into the habit of saving and give it time to compound. Try to reach the max tax saving amount as per your salary band, no more.
3. Create an RD to build an emergency fund, equal to 3 months salary.
4. AFTER you have done these, learn about other investment options. Start with mutual funds, set up SIPs in large capital or index funds.
5. Learn how to evaluate stocks, and invest in equities. Be prepared to lose this money at first. The point is to lose small amounts of money but gain experience and knowledge. Then once you start making profits, increase. This is high risk investing so do it early in career, when you have time to learn and recover.

All told, you should target saving at least 25% or more of your income. This is on the higher side, but the assumption is – you don’t have high expenses and EMIs… yet. They will be coming soon, but until then, get in the habit of saving as much as possible.

Avoid going under 10% savings at any time, even if expenses increase.

And read ‘Bad With Money’ for more tips like this.