INVESTING IN YOUR 20s
Sure, investments sound like rocket science, but they actually are easier than you think. Your twenties are the time when you take risks, make mistakes and learn the ropes of investment. Yes, you might still be in what we call ‘student mode’ and you might have just started making some money, but you need to make the transition from dependency to independence – investing early will help you do so. Here are 5 important investment tips for anyone in their 20s.
Start building your portfolio
It is always a good idea to start building a diversified portfolio from an early age – this can help you earn that extra income for important expenses in your thirties. Look at dividing your investments between small-cap, mid-cap and large-cap companies. You can also hire a personal advisor – this person will be like a personal trainer to manage your financial health.
Invest in your health
Speaking of health, it is important to understand that it’s not just your future self that might require medical treatments. Besides, the premium for health insurance is marginally lower for someone in their twenties than someone in their forties. So consult your advisor for a health insurance plan.
Don’t just stop at health insurance. Look at other ways you can buy insurance. Life insurance is a great way to save on your taxes. You can aim to help your family members with their financial needs, especially if they are dependent on you. Don’t ignore other insurance plans like travel insurance, auto insurance or rental home insurance – it is important to include these in your investment plan.
If you start saving in your 20s, you may be able to gather the corpus required for big investments like buying a house at an early age. You can also save some amount of money through investments in National Savings Certificates, Postal Savings Certificates, Savings bonds, Fixed Deposits etc.
Finally, invest in yourself.
Your twenties are when you explore life – so don’t forget to invest in yourself. Remember, the returns stay with you for life. Sign up for education and training programs and explore work opportunities abroad.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.