Hello Readers!
Youth today are more focused on earning as they have the need of maintaining their modern lifestyle. After their job, they do look for some extra work of their choice on weekends or holidays, to add a bit more in their regular income.
But they often lack when it comes to financial planning. The more the youth today is focused on earning, the more they tilt towards spending. All they do is to waste it. Financial freedom, lack of responsibilities, loan burden, can be a few common reasons for them not to save and invest.
Well, it is always advised by financial experts, that investing should be started in the early years of one’s career. Investing in the early stages of life is very beneficial. Here we are discussing a few benefits of early investing.
POWER OF COMPOUNDING
Return in a mutual fund is calculated based on compound interest. It means the returns are reinvested to earn higher returns. The profits earned might seem small, but, in the long term, they add up to become a considerable corpus.
Investing in the early years of one’s career also becomes easy with the concept of SIP (Systematic Investment Plan). You don’t a big amount, rather you can start your investment with a small amount on a regular basis. The longer you stay invested, the bigger your corpus is built up.
HIGHER RISK APPETITE
During the early years of one’s career, individuals are free from big responsibilities like children and wives. They are financially free and can take big decisions like investing their money in risky assets like equity mutual funds. Also, they have a proper time to cover any losses that occur, due to volatility in markets.
This all enables a person to take higher risks in their investment. Thus, it is advisable to start investing early. As the age increases the responsibilities increase, and this reduces the risk appetite of the person.
FINANCIAL DISCIPLINE
Started investing in the early years of one’s life, inculcates a habit of regular saving in individuals. It helps them to control their spending habits and make them stick to their monthly financial budget. This habit of theirs will pay off, in the long run, giving them a considerable corpus to finance their goals.
HIGHER CORPUS DURING RETIREMENT
Retirement planning, the most crucial part of one’s financial planning is often ignored by youth today. They think they have enough time to think about retirement and can start investing for it when they turn 35 or 40. However, as age increases the financial responsibilities will be more.
With increased responsibilities and expenses, it would become difficult to allocate a significant amount towards retirement. So, investing a little from the early 20s will reduce the financial burden and can help accumulate a considerable amount of corpus needed for retirement. Starting a SIP in mutual funds in the early stage of your life and taking it for the long-term, will help you create a good corpus for your retirement.
If you haven’t invested already, then start investing. Any time is the right time to invest. Better late than never right!
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 to future returns).