The joy derived from earning your first pay cheque is incomparable. A number of young people today earn INR 25,000 - INR 30,000 each month. While this may seem like a modest sum from which to set aside money to invest, investing can in fact be carried out with small sums as well. By investing at a young age, you can develop good financial habits and small sums are capable of generating wealth over the long term. Angel One recognises the importance of investing wisely owing to which it has created Knowledge Centre on its website. This has been designed to educate you about the markets, the securities operating within them and what kinds of investments are best suited to your profile.
#1. Establish a Debt-free Status
Clear any debt if you happen to have any as it can complicate your investing journey. While there exists no guarantee that your investments will attract returns, you are guaranteed to pay the interest applicable to your investments. In case an investment you make ends up incurring losses, the onus to pay interest on the debt have will still remain. Therefore it is recommended that you first direct your money towards clearing any debt prior to investing in the stock markets.
#2. Systematic Investment Plans Make for Good Investments
Systematic investment plans enable you to invest money on a monthly basis in a mutual fund scheme of your choice. A fixed amount is deducted from your savings account each month and is directed towards this plan. What makes SIPs stand out is that they can be invested in with a small amount. Investors benefit from the power of compounding which helps increase their holdings over a long period of time. Further, these plans help develop good financial habits. Investors are provided with considerable flexibility and generate more returns here than they would if their money was kept in a fixed deposit.
#3. Look Into Tax-saving Products
Tax saving products that allow you to achieve long-term financial goals should be considered. Among them, equity-linked saving schemes are worth noting as they permit the accrual of good returns while providing you with the benefit of saving on the taxes you must pay.
#4. Invest in your Health – Buy a Good Health Insurance Plan
The unpredictable nature of life requires you to be prepared and there’s no better way to do so than by investing in a good health insurance plan. With the security it provides, you will be able to gain access to good healthcare without having to worry about what it costs. A wise move would be to invest in a viable health insurance plan while you are still young and healthy as the premiums linked with your plan will be comparatively lower than those paid by individuals older than you.
Inculcating wise financial moves early on that include saving a portion of your earnings from each paycheque can help you develop your emergency fund. Once you have funds stashed away for a rainy day, investing in your savings is a possibility and these can help enhance your holdings over time. The Angel One website is here to guide you through your investment journey and help you make smart investment decisions.
1 This blog is exclusively for educational purpose
2 Investments in securities market are subject to market risk, read all the related documentws carefully before investing.
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