Are you in 20’s and waiting for 1st Pay Check? Though it is a natural tendency to enjoy the “Live in the Moment”concept it is the best time to plan for your golden years(Retirement)especially if you are in 20’s
Many people realise the need of retirement in early 40-50’s, but they don’t recognise they are already late! If planned properly, even small, small amounts would do magic in the long run, if you start investing in your 20’s(Even though the amount is small)
To be a successful investor, one must adopt this financial habits in their early 20’s. They are-
- Realising that managing money is more important than earning money- Some think that earning more money makes you rich! While some successful investors proves that managing money is worthisome by investing their hard earned money in capital appreciation assets.
Their investments would generate “Passive Income” for them which would be reinvested in better income generating products. These Passive Income process is continuously reinvested and generates far better returns than one’s who focuses only on salary hike.
- Underestimating long term returns– Some people can’t wait for long term! They need instant results! They should realise that investments takes its own time to fetch better returns! You must be patient to see the magic!
Do they passed the graduation instantly, No! They initially learnt alphabets and numbers in their kinder garden and slowly as years pass by, they gained knowledge and became experts in their field, isn’t it? Same applies for investing too- You should learn the basics and gradually you will become successful investor
- Realise the Pros and Cons of the investment product- Like a coin has flip sides, investment products too have its own advantages and disadvantages. Before investing in a product, ensure risk-reward ratio and take final decision
Generally Debt Products and fixed income instruments carries low risk and low returns. When compared to inflation, their returns are far lower.
While Equity investments(shares, mutual funds)and real estate investments are highly risky and generates inflation-beating returns. But you should be extremely careful in choosing the product category.
So analyse your risk profile and choose appropriate investment avenue of your choice.
- Beware of online shopping offers- As you are in 20’s, You may be tempted to wear fashionable accessories, clothes, watches etc. But be aware of the online shopping offers. They tries to lure your savings more than expected by giving various cashbacks, discounts etc.
The main intention of the online shopping offers is to “Spending you more”. There are tricks to make you spend on unnecessary things which is not needed at the moment.
If you are overspending on online shopping? Think Twice! Make your mind affirms to buy only needy things.
- Be Prepare a list before shopping- As you can’t control your emotions in your early 20’s, it is natural tendency to purchase whatever you like. But do remember, this is the age(20)to start saving for your future.
Balance your savings and spending in a right way! Confused! Let’s explain-
If you can’t control your emotions, prepare a list of needed items and wait to delay purchase by 30 days. In this 30 days, try to divert your mind by reading books, watching TV etc. At the end of 29th day, review the needed item you wrote in the list would be needed now or not? Maximum 95% of the items are avoidable. So in this way you can save lot of money which would be invested for your future needs.
If you still unable to divert your mind in these 30 days, do yoga and meditation which would keep your health and wealth in order
That surplus money would be invested for your golden years(Retirement)