I made my first investment at age eleven. I was wasting my life up until then.
Some of you
may have come across this quote. This is what the Great Warren Buffet quoted.
It was at the age of 11 that he first invested in a company and consider that
his life was a waste until then.
Here I am,
writing a blog about the importance of investments in your 20s and 30s, while Warren
Buffet has the opportunity to do it while he was 11. Even I started investing
at the age of 25, the point is we should not hesitate to do it when we start
working.
Such is the
value of investing at a younger age. He who understands and implements it will be
financially well-settled at an older age where he is weak and unable to earn.
Whether it's
20, 30, 40 if you are reading this and do not have any investment plans, please
think about doing it and keep on reading to understand its importance.
There may be
so many people around you who will advise you against investing in the stock
markets and force you to back away. As most of the people in India have a
demonic negative view of the stock market, due to their obvious lack of experience. To know about Stock Market, click here
One thing I must
emphasize repeatedly is that the stock market in India provides you good
opportunities to increase your wealth and is one of the well-regulated systems
under SEBI.
Why should you Invest in Stock Market? How safe is it?
Need for younger age investment
Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.
As the great
Albert Einstein quoted, the magic of compounding is what working here for you
in a younger age investment.
The effect
of compounding is much more awesome than you think when it starts earlier.
Because you are getting a larger time frame and most importantly you will be
rectifying the mistakes that happen during the initial phase when you become
capable of doing more.
Also, the
most important thing we could understand if we check the last 10 years' chart
of Nifty is the difference in the growth of Nifty and its growing year by year,
except for some dips that happen in between. Overall, Nifty has always been
following an upward trend till date.
The monthly chart of Nifty from 2005 to 2021
It’s always encouraging
to see Nifty, bouncing its way back after the corona impacted dip. Such is the
recovering power of the Stock Market of our country nowadays.
Learning and riskier opportunities
Age is not the barrier to learning, but it is when the learning involves money and risk. When
we are young and fresh a lot of barriers are not there for us. You may not be
the head of the family, or the sole breadwinner, and you may not have to take
care of your children, most of you may be having well-settled parents who may
not need your money to live on.
Of course,
you may have other things to take care of, especially if you are working far
away from your homes. The rent, food, and other expenses need to be taken care
of by yourself.
When I am
talking about the investment it doesn’t mean a lot of money. In fact, there is
thumb rule 50:30:20; your needs, wants, and, savings.
I am not
even talking about these ratios either, if you could save ₹500 or ₹1000 monthly
then it's a good start according to me.
You can
start with a ₹500 and keep on adding a little, learning from your mistakes and
taking some risks the possibility of a better return will eventually come your
way. For this to happen you need to learn and understand and sometimes experiment
with different methods and strategies.
All this
risk you can only afford when you are in your 20s or early 30s. Later you need
to play safe and ensure a minimum return. So, what are you waiting for? It’s
high time to start thinking about investing and starting early.
Financial discipline from a younger age
In India
mostly the youth starts earning is close to mid-20s after the studies. Yes, I
know most people won't be getting a decent salary or some may have some burdens
to take care of. Such people can wait for a little more as their salaries
improve or their burdens reduce and they may get into shape to have some
savings by the end of the month.
As for
people who are earning enough may not know how to spend wisely the earned money
and at the end of the month or year, they may become somebody not having
anything to spare.
A small
monthly investment plan will ensure some savings for them in the future and
moreover what these guys will attain is a financial discipline later by
recognizing the importance of that small investment plan they started when it
starts showing the signs of wealth multiplication.
Early retirement opportunity
You may have
seen a lot of videos or heard speeches of us running behind the money in our
good times and losing the most important part of life i.e., to have a little
enjoyment and happy moments. So, in the end, when you are old and weak you may
not be able to finish up your bucket list.
Now comes
the greatest importance of younger age investment. As you start an investment
as early as possible the chance of your retirement age reduces accordingly.
Your savings may be high enough for you to retire early and look for some
part-time jobs or as an expert consultant in your field and have time for your
bucket list.
Also, you
can withdraw the long-term investment and put a portion of that as a bigger
investment for getting more safer returns opportunities. Because now is the
time to reduce risk and enjoy safe returns.
Better late than never. As simple as that. Investing at a younger age will never be a bad thing because, in the end, you will always have something for sure. So even if you are late, just don't mind start something and have something. 😉
If you are late just try investing a larger amount if you are capable. It won't match the benefits of investing younger but will take care of some lost time. We will discuss some investment programs in the next blog. Stay tuned, until then ✌
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