It is advisable to pay off any existing debt before starting new investments. Any person has to start saving first. Then he’ll be ready for investing.
1. Start with Rs 1,000 for your starter emergency fund immediately.
2. Create a fully-funded emergency fund for a minimum period of 6 months.
3. Have sufficient risk cover for life and health.
4. Pay off all debt (except the house).
5. Invest a minimum of 15% of income through a Systematic Investment Plan (SIP) in equity funds for retirement and increase the SIP amount as income increases.
6. Start investing for your children’s future.
7. Pay off housing loan early than the opted tenure.
8. Create wealth and make a proper estate plan.
A person still living with his parents on their income can discuss a fully-funded emergency fund, debt, equity, investment, estate plan, etc., with his parents. He will get the basic knowledge of how much one should start investing once getting his income.
For example, if a person starts investing daily Rs 100 from age 25 till age 60, imagine how much he would be having in his account if he had invested in a top-performing equity fund that delivered 20% annualized returns. He will retire with just Rs 19.98 crores at age 60. Speak with your parents and teachers about your goal of becoming a Crorepati. Take our help on how to start investing and start it right now without further delay. (Also read our article Compound Interest).
We trust you and your capabilities. Don’t get into the vicious circle of the debt trap and the lie that the only possibility for a college education with debt. One can get a debt-less degree and schooling and fulfill all financial dreams by avoiding taking educational loans.
By Team Wealth ATM
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Mutual fund investments are subject to market risk. Read the scheme related documents carefully.