Getting Started With Investing (The Quiet Way)
Investing works best when it is boring, diversified, and aligned with your timeframe. The goal is not to beat the market, but to stay in it. Investing is not about speed, cleverness, or timing, it is about staying invested long enough for compounding to work.
1. Timeframe Before Any Product
Only invest in equities with money you will not need for at least 3–5 years.
If you might need the money sooner:
- Use a savings account
- Or a money market mutual fund
Markets fluctuate in the short term. Selling during a downturn locks in losses.
The market does not care when you need the money. Your plan must.
Risk in equities: uncertainty
The main risk in equities is uncertainty: you cannot be certain whether your investment will be in profit or loss at any specific point in time. That is why you give it a long span.
Over many years, at an average rate of return, even if the market drops sharply, history suggests it has often recovered, so holding long enough reduces the chance that you end up in loss. More time does not eliminate risk, but it gives volatility time to smooth out.
Examples of risk: the market might be down 20% the year you need to pay for a house; you might switch jobs in a recession and have to sell when prices are low. A long timeframe means you are less likely to need to sell at the worst moment.
Why a longer timeframe reduces risk
Short term: wide range of outcomes (up, flat, or down). Long term: at a typical average return, even big dips have often been followed by recovery, so the range of outcomes narrows toward the positive.
2. Emergency Fund: Your Real First Investment
An emergency fund prevents forced selling. It protects your equity portfolio from life.
You need urgent cash. If all your money is in stocks, you sell at the worst possible time. If you have an emergency fund, you do not touch your investments.
- Minimum: 6 months of expenses
- Conservative or FIRE-focused: 1–3 years
- Keep it somewhere liquid: savings account or cash-like funds
The purpose of an emergency fund is not returns. It is control.
How much is "enough"?
Suppose your one month expense is Rs. 3,00,000 (3 lakh), you should have about Rs. 18,00,000 (18 lakh) in your emergency fund to cover the basics (6 months). Depending on your career path you might need more. If it typically takes 8–12 months between job switches, aim for a bit more than 12 months of expenses.
It's all relative to you. Whatever you feel comfortable with.
What an emergency fund should be:
- Easily accessible in time of need
- Should cover ample expense needs
- Should give you peace of mind in day-to-day life
An emergency fund is there so you don't have to worry about month-end expenses or life's surprises.
Scenarios it protects you from
Without an emergency fund, a layoff during a market dip forces you to sell ETFs at low prices just to cover rent. With 12 months of expenses saved, you can job-hunt calmly and leave your investments untouched to recover.
Without a buffer, unexpected hospital bills or a family trip home often end up on high-interest debt. With a cash cushion, you can handle the expense upfront and keep your investing plan intact.
Boiler breaks, car dies, roof leaks. Without an emergency fund, these blow up your monthly budget and you pause investing. With a buffer, you pay for the repair and keep your automatic investments running in the background.
3. ETFs: The Simplest Way to Start
ETFs give instant diversification. You do not need to pick stocks to start.
Broad market or total market index ETFs are a common starting point, one or two funds can cover the market. In Pakistan, popular index-tracking ETFs include:
The Fund invests in a basket of 30 Shariah Compliant equity securities that are part of the Benchmark Index. Weights of the constituents will be based on the free float market capitalisation of each stock in the Benchmark.
The Fund aims to track the performance of the benchmark index which comprises of Shariah compliant equity securities selected with high consideration towards Market Capitalization and Traded Value.
Start simple. Complexity does not equal sophistication.
Most long-term underperformance comes from overconfidence, not bad markets.
4. FIRE Changes How You Invest
FIRE gives your investing a goal, not just a return target. Knowing your FIRE number clarifies how much to invest, how aggressively, and for how long.
A clear goal turns investing from guessing into planning.
Goal-based example
As a rule of thumb: multiply your yearly expense by 25—that’s your FIRE number, the amount you’d need to be financially free (based on a 4% withdrawal assumption).
Example: If your monthly expense is Rs. 200,000:
200,000 × 12 = 24,00,000 (yearly expense)
24,00,000 × 25 = 6,00,00,000 (FIRE number)
So you’d need Rs. 6 crore as your FIRE number. Now, how soon can you get there? Use your yearly investment and expected rate of return. For example, if you invest Rs. 12 lakh per year and expect 10% return, you’d reach Rs. 6 crore in about 19 years. The exact years depend on your numbers—use the FIRE calculator to plug in your own.
Years to FIRE come from compound growth: your yearly investments grow at your expected return until they reach your FIRE number. Higher savings or higher return shortens the timeline.
Calculate your FIRE number to anchor your strategy.
5. How Much to Invest (Without Overthinking)
Consistency beats timing. Monthly investing reduces emotional decision-making. Increase your investment rate when income increases, not lifestyle.
Focus on savings rate first, returns second. Here’s why that order matters, with examples.
Why savings rate matters more than returns
You control how much you save. You do not control what the market does next year. A higher savings rate does three things: it puts more money to work, it shortens the time you need to depend on returns, and it reduces the pressure to chase performance. In practice, raising your savings rate by 10% often changes your outcome more than squeezing an extra 1% return, and it’s entirely in your hands.
Two levers: only one is in your control
You decide the first. The market decides the second. Focus where you have control.
Example 1: Same income, different savings rates
Two people earn Rs. 60,00,000 (60 lakh) after tax. One saves 20% (Rs. 12,00,000/year), the other 40% (Rs. 24,00,000/year). Both invest for 20 years at a 6% annual return.
20% savings rate
40% savings rate
Doubling the savings rate doubles the pot, same return, same time. The lever you control is savings rate.
Example 2: High returns vs high savings rate
Person A chases performance: 10% return but only saves 10% of a Rs. 60,00,000 income (Rs. 6,00,000/year). Person B keeps it simple: 5% return but saves 30% (Rs. 18,00,000/year). After 20 years:
| Person A (high return, low save) | Person B (lower return, high save) | |
|---|---|---|
| Savings per year | Rs. 6,00,000 | Rs. 18,00,000 |
| Assumed return | 10% | 5% |
| After 20 years | ≈ Rs. 3,44,00,000 (3.44 cr) | ≈ Rs. 5,95,00,000 (5.95 cr) |
Person B ends up with far more despite lower returns. Consistency and savings rate beat chasing extra return.
- Focus on savings rate first, returns second.
6. When You Are Ready: Learning Beyond Basics
Only move beyond ETFs and broad exposure once your basics are stable. These are optional depth, not required steps:
- How to make 13 stocks portfolio
- Divided 50 Lakhs right away
- Age wise investing
- Fundamentals of Stock Market (playlist)
- 2 things you should know before investing in stocks (Emergency fund and Insurance)
7. Common Beginner Mistakes
- Investing without an emergency fund
- Chasing recent performance
- Overtrading
- Constantly changing strategy
Most investing mistakes are behavioural, not technical.
8. How This Site Helps
On this site you can also:
9. Closing Principle
You do not need to be early, aggressive, or clever. You need to be consistent, diversified, and patient.
Am I ready to invest?
A simple flow
This page is for education only. It is not financial advice. Outcomes are not guaranteed. You are responsible for your own decisions.