Hello Readers!
Millennials of today’s generation are focused more on flourishing their career and earning a lot of money. In the initial years of career, people hardly think of preparing a budget and then spend accordingly so that they can save enough. They have a thought in their mind, what is the use of earning if one cannot spend it the way they want?
However, as a financial planner I have witnessed, that, today millennials are more concentrated on saving their money as compared to people of the early generation did at their age!
But here question is, just saving money is enough? Well, definitely not. They need proper planning, to make their saved money grow big for their financial goals, and what’s the best way rather than investing, for it!
The generation today has witnessed exponential growth and large-scale evolution in the field of technology over years. This generation has seen the shift from physical to online modes of investments.
Here are some good features of investing that must be considered by the millennials so that they could easily understand the difference between saving and investing.
Compounding
When we invest our saved money in financial securities like mutual funds, we generally make our money work for ourselves. Don’t confuse! Okay, let me clear you. When it comes to investing, the foremost thing to look for is whether your returns are compounding.
Compounding means compound interest allows you to earn interest on interest. In investing, time plays a key role, that is, the more time you give, the larger would be the corpus you create!
Time Horizon And Goals
It’s much necessary for an individual to pick up their important goal for their investment and then plan their investment accordingly. It gives a clear picture of your current standing and where you want to be. It gives a roadmap to reach your milestone.
Inflation
Inflation increases with your needs, and investing your money is the only weapon that can help you defeat this so-called enemy, inflation. The inflation was 6.93 percent in August 2020. Make sure your investments beat Inflation. Otherwise, inflation will eat up your savings.
Be prepared for Emergencies
The COVID-19 pandemic is the best experience to realize the importance of having an Emergency Fund. This has probably happened for the first time in our lives wherein the whole economy had stopped. Medical contingencies, job loss, and salary cuts are some emergencies that you must be prepared for.
Have A Second Income
You have needs and your dependents have needs that are must be fulfilled. For these needs do not depend entirely on your job. Find multiple sources of Income. It can be a side business (if legally allowed) or earning dividends on your investments and so on.
Be Disciplined With Your Investment
Staying invested for the long-term and most important being consistent with your investment, are the major key roles when it comes to creating wealth for the future. You need to be consistent with your investment. In case if you can maintain the consistency manually, then go for automated investments. For instance, you can link your goal of buying a house to your savings, by starting a monthly systematic investment plan (SIP).
For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).