Securing The Future From Your 20s

By starting investments early, millennials can take advantage of their age and risk appetite.

- Suyash Desai

This story is a prequel to our previous issue of December 2018, where we helped readers to plan and prepare financially for their retirement. Whereas, the focus this time is on planning your finances from the start of your career till mid or late forties.

Today, with well over 25 years since the adoption of economic reforms, India has grown from $0.3 trillion economy to $2.8 trillion economy. This has resulted in an increase in the purchasing power of people, especially in Tier I and II cities. The post reform generation, who are in their twenties, is earning much more than the previous one. Also with better avenues and income, their spending and investment habits have changed. Taking cognisance of this, Outlook Money has decided to help millennials plan their finances and investments.

The most clichéd phrase used by planners is to start the investments as early as possible. Sonali Pradhan, Head of Wealth Management, Julius Baer Wealth Advisors, explained why. According to her, investments can create an alternate source of income through steady returns. “Objectives and needs should be the deriving factors for investments,” she said. But does anyone take this seriously in their twenties? Bhagyashree Pradhan, 26, journalist from Mumbai, does not invest. “I only have three LIC policies - endowment plans, which my father made for me,” she said. According to Jayesh Faria, Senior Executive Group VP, Motilal Oswal Private Wealth Management, “The new found monetary independence comes with many wish lists. At this age, life’s financial equation needs to be understood clearly. Generally, it is followed as Income minus Expenses equals Savings, instead of Income minus Savings equals Expenses, which is the correct equation.”