New Delhi, India
11 January, 2022
“The key to financial independence in the future is investing as early as possible,” say the experts of RKFS. Investing should be done when you are young, if you miss the opportunity and waste your time, the amount you will have to invest in the future will be 5-6 times more."
It's simple - the sooner you or your parents start investing for you, the more your money will grow. Let the compound interest work its magic: the fact is that the profit interest is added to the principal amount of the deposit and then it itselfparticipates in the creation of new profit.
Still, not everyone starts investing early. Many people think that they are still young, that they still have a lot of time ahead of them, and that they will have time to take care of their retirement.
Let us take an example- if you start investing Rs. 100 every month at the age of 35, then by the time you turn 65 that is 30 years of investment , you will have about Rs. 7,00,000. These 10 years of delay will cost you Rs. 24 lakh.
How much money do you think you will have to invest in the future to compensate for your loss? Hundreds, hundreds, and hundreds of rupees a month.
It should be noted that every investment carries some risk. No one can guarantee you a constant 15% return. But even if the profitability turns out to be low, it is extremely important at what age you start investing.
According to the spokesperson of RKFS, “the difference between the ages of 25 and 35 is enormous.It's not about the amount, it's about the time, so even if you can only invest Rs. 500 a month, do it”.
The 50-30-20 rule: how to manage your finances wisely!
Managing your finances and budgeting on a monthly basis is a challenge. But a fairly simple 50-30-20 financial strategy can make this process easier. The aim is to categorize your income into 3 parts:
• Savings and investments
What do these include? Let’s check!
50% for your needs
This category includes all of your basic expenses such as rent, mortgage payments, food, utilities, health insurance, debt payments, and car maintenance. If these necessary expenses take more than half of your income, then they need to be revised.
30% for your wishes
It includes everything that is not considered necessary, such as travel, Netflix subscription, dinner at a restaurant, shopping, and entertainment.
This category could include improving the quality of life: if you buy an expensive car, although your needs may well be met by a cheap model.
20% in savings and investments
Since 80% of your income has already fulfilled your basic needs and wants, it is time to have the remaining portion work for you for the betterment of your future.
Financiers usually recommend having a financial cushion for 3 to 6 months, that is, enough money to live this time without income. Having collected such a financial cushion, you should definitely start making investments of the surplus carefully.
You don't need a lot of start-up capital to buy securities or to invest in SIPs; you can start with a small amount of money. Such a step can bring a great positive change in your life and we guarantee you that this safety nest will surely turn out to be useful for you.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This is just an approximate calculation with CAGR 16% and does not guarantees any confirmed return.