“Investing” looks like an alien word if you’ve just got out of college and started with your first job or business or even for those who are making money while they are still in college. The problem that everyone at this age faces is “that they don’t have enough money to invest”. Well that’s only a myth because you really don’t need a lot of money to start investing. Investing even very small amounts at this age can reap big rewards going forward. Here are 3 simple steps that can get you started:-
- Make a weekend money fund – Since you’ve just started earning, I am sure you already have lot of plans to spend on things you wanted to buy or do ever since you were in college. Well now that you have some money in hand, make sure you fulfil all those lists smartly without losing all the money in hand. All you need to do is :-
- make a list of all things you want to do in next one month
- write down the amount that you think you will have to spend on them
- prioritize which one’s you want to fulfill first and
- Create a Weekend Money Fund and set aside the amount as per your priority list for them in your Weekend Money Fund.
Liquid Funds can be a good Weekend Money Fund as it offers the flexibility to withdraw or invest the money by just sending a SMS and offers higher returns than your bank account.
- Invest in Equity and forget it – Since you really haven’t thought much about the future and have no long term plans; it’s best to park some savings in plain vanilla equity mutual funds and forget it. When I say forget it, I really mean it. Remember equities are volatile in nature and are the best bet for the long term; so don’t evaluate its performance every now and then.
- Automate your savings – Making savings and investing a habit is a challenging task and you might miss on it because something else came up. Hence it is recommended to automate both the Weekend Money Fund Savings and Equity Savings and its ok if you want to start with as small as Rs. 1k – 2k. The best way to automate your savings is to start a SIP.
In the end I would like to conclude by saying that you just have to get started. Once you do it; it will get easier as the time goes on. And your future self will love you for it.
