Reasons you should start investing in your early 20s

Since our childhood, we’ve been told to be centric and focused on our goals and our future prospects. We are guided into which professional line we can take and where our interest lies. The schools teach us the importance of money and how can earn but not the ways we can grow outside the general shell of normal income. When we first start into the professional world and start earning, the income expectancy is low. For some people, the only way to make more money is to run yourself out to earn yourself a promotion and thus an appraisal or, in cases of business, wait for it to boom.  From there, we must now control all of our monthly costs, including rent, food, transportation, etc. Additionally, the urge to spend is stronger since you are working hard and sense a sort of ownership over the money, and at this point in our lives, the last things on our minds are saving money and investing.

But in today’s world, investing is the new norm if you want to make more money without running yourself out from your already existing early stages of income. However, investing early has a number of advantages. In today’s Achal Chaurasia News, we shall talk about these advantages and reasons why you should start investing in your early 20s. 

The investment amount can be low due to the longer investment tenure 

We all have aspirations and goals and things we want to do in our lives live to buy ourselves a new car, live in our dream house, or plan international trips, etc and all these dreams require tons of saving and growth. But no matter how much you save, you still can’t save that big of amount unless and until your earning scale increases. Therefore a wise choice is to put your money into equity mutual funds. Despite the fact that mutual funds do not guarantee returns, their long-term returns range from 12% to 13%. You would now need to invest Rs 15,000 per month in order to save Rs 20 lakh over seven years. Additionally, the total amount invested would be Rs 12 lakh. In the meantime, to achieve the goal in a timely manner, you would need to invest Rs 25,000 per month if you began investing two years later. Additionally, the total amount invested would be Rs 15 lakh.

Your spending pattern will improve if you start investing early

Investments make you aware of how to play around with your warnings. They make you realize the importance of savings and thus help you make wiser decisions while spending. Your spending habits will automatically improve if you begin saving and investing early. When you develop a personal budget depending on your spending habits and requirements, you will have to limit your budget to take out the required amount for investing. Now, in order to make saving a habit, first save the amount you want to save each month. The remaining amount should then be used to establish a monthly budget. So for example if you’re earning Rs. 25,000 per month, taking out Rs. 10,000 in total for investment leaves you with Rs. 15,000 for your personal expenses. In addition, keeping track of your monthly spending on things like food, utilities, rent, leisure activities, and other necessities is one of the most 

You can accumulate a larger corpus by remaining invested for a longer period of time 

They say consistency pays off and it indeed does. When you are consistent with your investments for a longer period of time, you are not only saving that specific amount, but the returns on them help you outgrow that specific amount of money. Because staying invested for a longer period of time allows you to reap the benefits of compound interest, the corpus you build up over time will also be much larger. For example, even if you only invest 6,000 rupees per month, you can build a corpus of 4 crore rupees by starting early, at 25 years old, and remaining invested until you are 35 years old. The longer the period of your investment tenure is, the larger will be the expected returns. Therefore, it is always advantageous to begin investing early and to continue investing for a longer period of time in order to build a substantial wealth without compromising your daily standard of living or feeling the pinch on your pocket.

You are able to take risks 

When you are young, you are more likely to take risks than when you are older. Because you have fewer financial responsibilities at this age, you don’t have to give much thought to whether you should put your money into a risky product. And even if you make mistakes with your investments, you would have plenty of time to learn from them and move on.

The rule of thumb for investing in equity, for instance, is 100 times your age. That is, you can put 70% of your money into stocks and the rest into fixed-income investments when you are 30. As a general rule, if you are 22 years old, you can invest up to 80 percent in stocks. However, if you start investing at 45, you might not want to take on as much risk, so the general rule is to only invest 55% in stocks. In addition, despite the fact that equities carry a higher level of risk than fixed-income products, they have the potential to provide you with higher returns in the long run and assist you in building a larger corpus from a smaller investment amount.

Through this Achal Chaurasia news, begin your investment process right away if you haven’t already. Start small, keep things simple, and learn more as you go. Keep in mind that wealth creation is a process that takes time and cannot be rushed. Additionally, time is your greatest advantage as a young earner!

Also, read- Why Must You Start Investing in 2023?

Author- Achal Chaurasia

A superior and highly experienced entrepreneur in the field of business for quite a long time now. Also, a philanthropist, author, and public speaker who believes in working towards the overall well-being and betterment of society as a whole.

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