29, salary Rs 1.1L, work at a startup. Should I start SIPs first or sort insurance and emergency fund?

Before starting market-linked SIPs, you must first secure your financial foundation with term insurance, health cover, and a robust emergency fund.

A practical rule of thumb is to put three pillars in place first: term cover, health cover, and an emergency fund sized to how stable your job is. The urge to start SIPs quickly is a good instinct, but investing without protection is like building the upper floors before the foundation is set. If something goes wrong without these pillars in place, you may be forced to sell your investments at a bad time, defeating the whole purpose.

Step 1: Know your numbers. You've already done most of this by calculating that you earn about Rs 1.1L and spend about Rs 55k, which leaves roughly Rs 55k a month. From here you work backwards to determine how much you need to save and for what specific goals.

Step 2: The three pillars. The first pillar is life insurance through a term cover, which protects anyone who depends on your income. The second is health insurance, as relying only on company cover can be risky, especially in a startup where a job change or layoff means that cover disappears overnight.

The third pillar is the emergency fund, and this is where your industry really matters. A common guideline is around 6 months of expenses if you work in a low-risk, stable industry, but in a higher-risk industry the cushion should be closer to 12 months. With Rs 55k in monthly expenses, 6 months works out to about Rs 3.3L, while 12 months is about Rs 6.6L.

Given that you describe the startup as not very stable, you should lean towards the higher end of a 12-month emergency fund. Your current Rs 2L covers less than 4 months, so you don't necessarily need to wait a full year doing nothing. One way to approach this is to split your monthly surplus for a while.

For example, a part of the Rs 55k could go towards building the emergency fund to about Rs 6.6L over several months, while a smaller SIP could start alongside so the habit gets formed. Term and health premiums come out of the same surplus, and these are usually small compared to the protection they give.

Step 3: Then bucket your goals. Once the pillars are done, the full Rs 40k SIP has a much stronger base, and at this point you can ask what each rupee is for: retirement, a house, or consumer purchases. Tying each SIP to a goal makes it far easier to stay invested when markets turn flat or volatile.

You're not late at 29, and getting the order right matters more than starting next month.

Based on Raghav's podcast with Sachin: https://foliyo.ai/blog/wealth-management-in-ai-era/
Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.