Youth. It’s that time of our lives that “all of us” wait for and the “old” long to go back to.
Youth is recognized as the most valuable asset of any nation as it’s the youth that takes the nation forward. 12th August has been designated as the International Youth Day (IYD) by The United Nations and is observed as the day to draw attention to youth issues worldwide.
Since The Youth Day is just round the corner, I thought to do my bit to let the young people know a few things they should pay heed to before they grow old and regret that “had someone told us then, things would have been different”.
1. Invest in your future
We stand in 2018 and we know for a fact that we are going to live longer and work lesser than what our ancestors did. That’s the reality, embrace it. We’ll not just have to plan for our lives in retirement, we’ll have to plan for a long life that may last for more than 30-40 years.
Hence now, (when you’re young and making money) its the best time to invest in your future. All you got to do is consider yourself as a blue-chip investment and start investing in yourself. Set aside as much money as you can after taking out the money needed for your essentials and invest in your future (best is to invest in equity mutual funds). Do it even if it requires you to sacrifice on your few outings, shopping sprees or vacations.
Growing old will not be bad if you consider the alternative.
2. Time Is Your Best Friend
Time is your greatest asset. People often underestimate the impact of compounding. In simple terms compounding is “Interest on interest” which means the money you invest today snowballs over time as you gain interest not just on your original investment but also on the money it picks up along the way. However, compounding shows its magic only in the long run.
Time compensates for the risks of investing. Often, I say that equity investments take you for a roller coaster ride and you need to forget your investments for next 10 years if you’re investing in equities. It’s because, if you have time you can compensate for the losses that you might have incurred along the way.
“Warren Buffet started investing at the age of 11 and he accumulated 75% of his wealth after his 50th birthday”
3. You need emergency savings—no ifs, ands, or buts
Before you jump on doing the above, it’s imperative to secure your present too. A recent study found that only 1 in 3 millennial’s have enough money saved for a medical emergency or car repair—forget about covering rent and food in case of a job loss. If you leave yourself with no cushion, just one unexpected expense can send you into debt that might end up following you around for years and even impact your future plans.
So before you get started with your future plans, you got to have an emergency fund in place. Make sure you keep your emergency funds in a place that not only gives you returns but can also be liquidated easily.
To follow this kind of lifestyle and to achieve the kind of aspirations that the youth of today are capable of, financial planning is a must and cannot be ignored.
May we go so deep as to say that the book of one’s life and the pages of one’s financial plans are inter-connected. The wise decisions taken NOW is what will help you sail through youthfully.
