Start investing at an early age

Y K Gupta

Start investing at an early age depicted by an INVESTMENT signage

 

Very high chances are that you have started earning a reasonable amount in your early twenties. But due to lack of proper financial planning you may end up not having the elite life style you deserve.

In this article I will discuss how to achieve our financial goals by choosing proper tools of investment and start investing at an early age.

Start investing at an early age

In order to reap full benefits of magical tool called compounding you need to start investing at an early age. Further, you also need to choose your investment vehicle wisely and avoid taking goofy risks.

However, liquidity is also of utmost important and therefore you need to keep money equal to at lest your 1 year’s expenditures in your running bank account.

Invest in diversified growth mutual funds

And thereafter start investing whatsoever savings you have in some large corpus growth option diversified mutual fund through SIP.

And after that just sit tight and see the magic of compounding happening right before your eyes.
Invest in house properties

Forget ‘Rich Dad Poor Dad’ as in most of the cases house is an investment and not a liability. It saves you rentals and barring the exceptions, its value also keeps on rising.

After you have enough money available in your mutual fund account to meet the margin requirements for a housing loan, go ahead and take a housing loan and buy a house property at an early age.

Start investing at an early age depicted by a photograph of a house
Start investing at an early age

As there is hardly any better investment than buying a house property.

Further, if you take a housing loan you will also reap benefits of tax concessions on repayment of installments and interest on your housing loan.

Also, owning a house will add up to your social status.

Always before buying a car buy a house, as car is expenditure while house is an investment.

Don’t take goofy risks

Keep in mind that if you are in your twenties that doesn’t mean that you should take goofy risks, as money is money for young, old or for a person of any age in between.

Further, you will lose the benefits of compounding if you lose money initially and start investing sensibly at a later age.

Note- This article is based on one of my answers on Quora, link for the same is given here-

https://www.quora.com/My-age-is-23-and-I-earn-50k-pm-I-save-20-25k-pm-What-amount-should-I-keep-in-mutual-Fund-and-what-should-be-my-savings-plan

 

Y K Gupta

Related article- What is preferable buying a house or investing in mutual funds?

Author: Y K Gupta

Author, Blogger, former AGM State Bank of India (SBI)

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