Financial Lessons For The Young People

Young people are often confused about their financial goals. Their savings are negligible. As soon as they land their first job, savings should be their priority. It helps to stabilize your financial situation and make them more focused on their financial goals. 

Many youngsters do not have adequate financial knowledge since the educational system does not delve deep into the subject of personal finance. Hence, there is substantial ignorance on this subject. 

In the era of rapid technological changes and job insecurity, it is important to be financially literate. Every youngster requires financial security in terms of savings investment and insurance. 

Many youngsters invest in short-term fixed deposits thinking that it will provide them easy access to money as and when required. They depend upon the group insurance provided by the employer. This could be a costly mistake. The bank deposits, though safe, do not provide adequate returns that can beat inflation. The excessive reliance on group insurance good also proves costly if one loses his job. Term plans provide high coverage with low premiums. Insurance should not be bought with the angle of profit. 

The young people have time by their side. They can afford to take a risk and hence depending upon your investment horizon they should invest inequities. For someone having no knowledge about stocks, mutual funds are his best bet. Equity mutual funds can help to realize various financial goals that a person might have. 

Value investing is important to focus on risk management. Risk management means investing the money in such a way that it can withstand the volatility in the markets. The investment mix of equity funds debt funds and gold funds can help the person to spread the risk across various asset classes does ensure that his capital does not suffer during volatile Times. 

It is also important to have an emergency fund but instead of parking the money in a savings bank account, one should invest in liquid mutual funds. These finds not only deliver higher returns but can also be sold if the need for money arises. 

Equity Mutual Funds are the best bet to build one's retirement Corpus. One can expect returns in the range of 15 to 18% per annum in the long run. Not only it helps to beat the inflation but also provides an opportunity to build a decent Corpus with small investments provided one starts early. 

Finance is a tricky subject. Instead of investing haphazardly, one should consult a qualified financial planner to seek his advice about investing options available.