Investing should not have to be something people find complicated and thus stay away from. There are plenty of apps and resources on the internet where one can learn and understand the workings of the share market. However when young adults are just starting their individual lives, thinking about investments tends to be at the bottom of their to-do list. They have other responsibilities to worry about like, starting their career, rent or student loans, which means that setting aside money to invest is often overlooked. This article covers some basics for young adults to consider when taking up investing.
How much should you save for investments?
When a young person wants to set up an investment plan, to achieve their future monetary goal, financial advice experts suggest saving around 12-15 percent from their salary. Then as each year passes, one should increase their savings by one percentage allowing you to reach the goal to find themselves with a bit of money to invest in financial products like stocks.
Conduct Sufficient Research
A youngster starting their investment journey should often look to start slow. Before someone starts purchasing equities or invests in mutual funds, a good amount of time needs to be spent conducting financial research. There are a lot of investment tactics one can follow, but just following what the crowd is doing may in fact lead to more problems. While forming your strategies, listening to your own instinct and following your own research is the first step. Taking the time to understand how the stock market works, how financial markets behave and how particular shares have performed in the past and kept up with predictions, can help you understand what to expect when you start trading. While investing, it is important to keep up to date with the latest updates going on in the industry. Even the slightest political, economic or social issues can have a disastrous effect on the markets as a whole as well as you own investments.
Saving for other goals
It might be easy to say that starting to invest is the way everyone should go ahead, most people have other immediate priorities like paying off a debt, getting married or buying an apartment. If you need to achieve these short term goals in three years or less, you do not need a risky approach. One can use a high-yield savings account or
put their money in a fixed deposit since there is minimal risk involved and you would be earning interest. Young adults can also approach a mixed strategy where they save one half of their income and invest the other in mutual funds.
In conclusion, whether you decide to save your hard earned money in a savings account or invest in the stock market, having a well thought out financial plan is of the utmost importance. Nowadays it is easy to find tutorials, research, advice and tips for trading on any BSE & NSE India mobile app available online.