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Playing the T20 of life

Consequently there’s not much left to save and invest. No wonder, youngsters tend to become slaves of a hedonistic lifestyle, one that’s inevitably marked by financial instability.

June 17, 2015 10:32 IST | India Infoline News Service
The twenties are the most tantalizing and happening phase of one’s life. At that sunrise age, we find more fun in exploration and strongly detest any kind of reflection. That’s precisely why take pride in working hard and playing harder. Consequently there’s not much left to save and invest. No wonder, youngsters tend to become slaves of a hedonistic lifestyle, one that’s inevitably marked by financial instability.
 
Even for those who earn well, lack of financial discipline makes a mess of their saving and spending patterns. To make matters worse, rampant use of credit cards and high incidence of late payment charges add to the recurrent money bleed, month after month. If you are in your twenties and wondering how you can escape this vicious trap that’s doomed to failure, the way out is not as difficult as it seems. Simply do the following on a consistent basis:
 
Enlist
 
You need to chalk out your life priorities in black and white and then translate them in money terms. Once you commit the money value of your priorities in black and white, you move towards fulfilling them responsibly. The goals can be divers – from buying a new house to owning a car, from getting married to settling down. Long-term goals should be necessarily prioritized and retirement planning is mandatory, even if you are young.
 
Enter
 
It’s important to begin, whatever the quantum of your investment. SIP is the best option as you can mark your debut with as little as Rs. 1000 to Rs 5000 a month and choose a mutual fund that assures high returns over a large investment horizon. A SIP of Rs. 5000 at 12% ROI for 25 years could create wealth close to Rs. 94, 88,175—such is the magic of compounding!
 
Explore
 
Equity funds typically help notch up long term returns of 12% - 20%. While debt funds would bring in 10% -11%, Bank FDs can only fetch 9% - 10%. Other options include Public Provident Fund with ROI of 8.5% - 9% and National Pension Scheme at 10% - 15%. Balanced funds are ideal for investment as they maximize your return at minimal risk through a judicious blend of debt and equity and you can also avail of the tax rebates in the process.
 
So what are you waiting for? Make the most of your twenties…relish the good times but not at the cost of your future.
 
Happy spending, happy saving, happy investing…  

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