This is a story with many endings. But one beginning.

This is the story of two siblings, born a few seconds apart. While the world, including their parents, thought they were identical, they were far from it.

Over the years that difference couldn’t have been more apparent, from what they liked to what they read but who would’ve thought they’d start their first jobs on the same day in the same office, sitting right next to each other.

A more financially enlightened friend sat them down with their identical first salary cheques and spoke to them about financial management; a thing no one, not even their parents, had ever mentioned before.

Somewhere in that conversation investments and passive income crossed paths, and both of them decided to give it more than a thought.

From those first salary cheques started their first investments. And right there the similarities ended. Both decided to invest ₹5000 each. While the elder, only by a few seconds, of the two decided to stay a bit conservative, the younger one had more ambitious plans, both with his money and time.

So here’s how things could be different for both, knowing that both of them had pretty much the same lifestyle and expenses and hence the need for liquidity.

Even though neither was wrong, the younger one invested in various mutual funds, including debt based liquid funds that have a better yield than a Fixed Deposit with almost the same negligible risks. And mid cap equity based mutual funds because the yield is typically higher, despite higher risks.

And while seconds might have separated them at birth, the right investment decisions separated them in their understanding of money and wealth creation. Senior took a more conservative approach but with assured returns, junior decided to use his money for higher returns even though they come with higher risks. In case you’re looking at starting your investment journey or are already investing, do remember these four points their friend told them.

1. Know your expenses

Investing has nothing to do with investing but getting a better understanding of your own expenses and setting aside money in our bank account for those and any unforeseen emergencies.

2. Risk-taking ability

Understanding your own risk-taking ability and ascertaining what may or may not work for us. Even though it might be passive, any investment requires involvement and hard work in the initial stages.

3. Start small

Let’s not dive into the deep end till we have a better idea of what works for us.

4. Weigh your options

If invested differently, can your money make more money?

E.g., a Large Cap Mutual Fund investment would any day generate higher returns than a liquid fund, which in turn would make more money than a fixed deposit, and a fixed deposit more than a savings account.

On the Freecharge app, you’ll find investment options that match your risk to returns expectations. You can browse through the ratings and potential returns before making a more informed investment decision.