7 Easy Steps to a Successful Investing Strategy for Young Investors
By Urvashi Arya
#Investments
#InvestmentsBlunders
#YouthPortfolio
#WiseDecisions
#ToGOFinances
You Will Read This Year's Best Investment Strategies For Young Investors
According to Facebook Insight, 49% of those who browse the site are between 25 and 34. As a result, we decided to write Investment Strategies for young people, and here it is. You could be single, recently married, or thinking about beginning a family. You might be on the verge of beginning a new job or settling into your current one. You may or may not have purchased a home. Continue reading if you fit these criteria...
1. Generic Alternatives:
If you instill the proper financial management approach at a young age, you will live an enjoyable life. You should establish a financial plan for them and write down their financial goals. Building a house without a blueprint is perilous; therefore, one must plan before acting. Professional Financial Planners can assist in guiding one in the appropriate route. Make sure that all financial products are chosen based on a NEED-based analysis and that products that combine needs-based life investment with insurance, for example, should be avoided. We attempted to give a financial management road map. However, their approach is generic. The final decision should be made depending on their circumstances.
2. Young people's insurance:
It would help if you only bought Term Insurance, with a coverage of at least 15 times your yearly salary. If the annual income is Rs.5 lakhs, the payment insured should be Rs.75 lakhs. Term insurance for such a sum might cost anywhere between Rs. 10 and Rs. 12000/-, depending on his age, health, and habits. Any other type of life insurance or unit-linked insurance plan should be avoided. There is no need for a term plan if there are no dependents. If your employer does not provide an accident or a medical insurance policy, you should purchase them individually.
3. Real Estate Investing:
Only consider property investment if you intend to live in the home for at least ten years. There is no pressing need to make a decision right away.
4. Corpus of the Emergency:
People of this generation frequently live on credit, and many of them are cash-strapped by the end of the month. Start placing money into short-term funds to build up an emergency fund of at least six months' worth of costs. Avoid relying entirely on credit cards. Make it a habit of routine to pay with cash or debit cards. "Agar jindagi udhar pe chal rahi hoti hai to sachai door ho jati hai," K K Menon says in the movie Shuarya.
5. Investing in Money:
Even if you are investing through EPF, you should register a PPF (Public Provident Fund) account soon after starting your new work (Employee Provident Fund). We are not advising young individuals to invest the most significant amount possible. However, one should register a PPF account and deposit a small amount to complete the account's lock-in period as soon as feasible.
SIP (Systematic Investment Plan) in Diversified Equity Funds should also be started. This should account for at least 10% of your monthly income.
6. Start putting money down for retirement:
It would be of great help if you did not assume that they are too young to consider retirement. We only want to point you that, because you have the POWER OF TIME on your side, even a tiny contribution to your retirement corpus now will grow to be a significant sum when you retire. Time cannot be repaid at a later point by investing a large sum of money. For such planning, SIPs in Diversified Equity Funds are the best alternative.
7. Young people's loans:
Loans such as education or home loans are beneficial, but taking out a loan to purchase a luxury car or go out to relish an exotic vacation is terrible. Also, credit cards should only replace cash handling and make payments more accessible; they should not be used to obtain a loan.
Young investors should avoid the following blunders:
1. Investment-Linked Insurance (ULIP)
2. Spending on DESIRES/WANTS rather than necessities
3. Investing in Liabilities rather than Assets
4. Creating a Portfolio in the same manner as your parents
5. Ignoring the need for financial literacy
6. At this point of life, being a cautious investor
Urvashi Arya
Content Writer - Vantage ITeS Consulting | LinkedIn
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