Planning​‍​‌‍​‍‌​‍​‌‍​‍‌ your investments based on your salary is one of the smartest financial decisions you can make—whether you earn ₹20,000, ₹50,000, or ₹1 lakh per month. A proper investment action plan empowers you to handle expenses, save regularly, and acquire compound wealth over the years without any hassle. In this guide, you will figure out how much of your salary needs to be invested, which is the best place that offers investment, and how to sketch out a simple, practical income-based investment plan that fits your level of earnings.

1. Follow the 50-30-20 Rule (Most Popular Method)

Planning your investments by salary is made easy by the 50-30-20 rule which entails: 50% – Necessities: Housing, food, and other essentials like electricity and water bills, transport
30% – Desires: Clothing, traveling, and entertainment
20% – Investments & Savings: SIPs, PPF, RD, FD, emergency fund If the amount of your salary is not enough to meet your needs, do investing for beginner starting at 10% and gradually increasing with income.

2. Calculate How Much You Should Invest From Your Salary

Here’s a straightforward recommended breakdown:
Salary Under ₹30,000
Invest 10%

• Through regular investments in an index fund, the Systematic Investment Plan (SIP) will be initiated.
• Creating an emergency fund of ₹25,000 would be the next step.

Salary ₹30,000 – ₹60,000
Invest 15%–20%

• Begin Systematic Investment Plan (SIP) along with PPF
• Establish a 3-month emergency fund

Salary ₹60,000 – ₹1,00,000
Invest 20%–30%

• Choose a combination of monthly investment plan (SIP), ELSS, SGBs, and index funds
• Create an emergency fund that will cover your expenses for 6 months

Salary Above ₹1,00,000
Invest 30%+

• Put additional money in mid-cap, small-cap funds, NPS, bonds
• Emergency savings can be from 8 to 12 months of living expenses

3. Best Investment Options Based on Salary a) SIP in Mutual Funds (Best for All Salaries)

Starting amount can be just ₹500 or ₹1,000 per month.
Best funds: – Index Funds (lowest risk) – Large-Cap Funds (stable) – Flexi-Cap Funds (balanced)
b) PPF for Safe, Long-Term Growth
Perfect for salaried individuals who would like tax benefits + assured returns. c) ELSS Funds for the Tax Saving Purpose
Perfect for individuals who fall under Section 80C. d) Emergency Fund (Non-Negotiable)
RD, savings account, or liquid funds are good places to keep the emergency fund safe. e) Gold (Sovereign Gold Bonds)
Good for diversifying your portfolio; plus 2.5% interest. f) NPS for Retirement
Tax advantages + long term ​‍​‌‍​‍‌​‍​‌‍​‍‌compounding.

4.​‍​‌‍​‍‌​‍​‌‍​‍‌ How to Build the Perfect Investment Plan Using Your Salary

Step 1: Track Expenses

Be aware of where your money is spent.

Step 2: Fix a Monthly Investment Amount

It is a good idea to have auto-debits set up for SIPs.

Step 3: Prioritise Emergency Savings

The point of saving first, before investing aggressively.

Step 4: Diversify Your Investments

The use of only one investment type should never be your decision.

Step 5: Increase Investments Every Time Salary Rises

A 5% raise, for instance, can make a big difference in the long run.

5. Example Investment Plan Based on Different Salaries

If Your Salary Is ₹30,000 ₹3,000 → SIP ₹1,000 → Emergency fund ₹500 → RD If Your Salary Is ₹50,000 ₹7,000 → SIPs (index + large-cap) ₹2,000 → PPF ₹1,000 → Emergency fund If Your Salary Is ₹80,000 ₹15,000 → ​‍​‌‍​‍‌​‍​‌‍​‍‌SIP

6.​‍​‌‍​‍‌​‍​‌‍​‍‌ Mistakes to Avoid While Investing Based on Salary

• Investing without an emergency fund
• Putting all money into one mutual fund
• Expecting quick returns
• Stopping SIPs during market dips
• Not increasing investments annually

Conclusion

Your salary is not the factor that decides how rich you will be—it is your planning that does. By investing a fixed portion of your income, diversifying wisely, and consistently increasing your investments as your salary goes up, you can create substantial long-term wealth without any kind of pressure. Take a small step at a time, be consistent, and allow compounding to work for ​‍​‌‍​‍‌​‍​‌‍​‍‌you.