Money Tips For The Millennial Generation

The millennial generation is different from its peers when it comes to investing. The high disposable income makes many millennials wary of budgeting. 

The millennial generation believes that saving should complement spending, and this is evident from the rising savings rate among them.

But simply saving might not be enough. It is important to have a clear roadmap of one's financial goals. In the long run, proper planning of one's financial goals will reap rich rewards ensuring that one can maintain a comfortable lifestyle even after retiring.

The millennial generation has the advantage of technology. Online mode of investments have replaced physical mode and coupled with information on their fingertips, this generation is making the most of opportunity. 



Savings is useful only if money can work for itself. Young people have time by their side, and they are better equipped to take advantage of the power of compounding. A small investment today makes a huge difference 20 years from now. For example, if one invests just Rs. 5,000 every month in an equity mutual fund, then @15% p.a., one can amass Rs.74 lakh after 20 years! Early investing can make one millionaire early.

Investing alone is not enough. One must be vigilant about their financial goals. There might be few goals competing for your attention at a particular time. The goals could be short-term or long-term. Hence it is important to have an efficient asset allocation plan. The maxim, "do not put all your eggs in one basket," explains the concept of asset allocation. It is important to diversify one's investment in equity, debt, gold, REITs. This helps to reduce the impact of volatility on the portfolio.

Debt management is equally important. The haphazard credit card utilization can dent the credit score and speaks about the irresponsible behavior of the cardholder. Many overuse credit cards, and invite heavy interest charges which otherwise could be put to more productive use.

Ideally one must seek the advice of a professional financial advisor who is the right person to identify the right investment opportunities after thoroughly analyzing the risk profile of the investor.

Comments

Post a Comment

Popular posts from this blog

How SIP Calculator Can Help You?

Image
  www.investonline.in  website provides a tool known as an easy-to-use SIP calculator for comparing different plan options. You can use SIP calculator to gauge the potential returns your capital will get in future. Example: If you invest ₹1,000 in a ₹50 per unit SIP, what kind of returns will you see? You can select a 5-year rolling return for your calculation. The result shows an expected growth rate of around 12% per annum for the ₹1,000 investment. The longer the period, the higher the returns. The tool calculates returns as a percentage. If your contribution is made for a 15-year period, the estimated return on your investment will be in the range of 15.5% to 17.7%. This shows that SIPs have the potential to deliver higher returns compared to other investment options. However, you will also get higher risk. Minimum Invested Amount Most SIPs come with a minimum amount for investment. This is what the fund house requires as part of the SIP contract. The minimum amou...
Read more

Do you really need international funds in your portfolio?

Image
Answering yes to the above question means that now is a good time to review your international exposure and rebalance your portfolio. If you find that you do need international funds in your portfolio and you still have some money left to invest, then consider adding an international fund to your portfolio. You should be aware of some risks, though. International funds are complex International funds are complex in several ways. First, they often have more than one series of shares and different types of units are available. So, before investing, you need to ensure that you understand how the units are listed, traded, and are tax-efficient. In addition, while the underlying portfolios are generally similar, the funds can vary widely in their credit ratings, liquidity, liquidity requirement, etc. You have to consider a lot of different factors before investing in an international fund. What makes international funds volatile? International funds are more volatile In gener...
Read more

Why Arbitrage Funds Are Attractive For Conservative Investors

Image
The markets are trading at lifetime high seas but many investors are jittery and are hesitant to invest in the present market. Historical e equity funds have delivered above-average returns and will continue to remain the best asset class. However, equity investments are volatile and one should always and sure of the safety of their investments during volatile times.  If you find present levels of the markets quite high and fear volatility you can invest in arbitrage funds. The objective of the arbitrage fund is to preserve capital while delivering modest returns on capital invested. Arbitrage funds invest an equal portion of equity and futures. For example, if the fund buys 1000 shares of X company encash market it sells the same number of shares in the futures market. They also invest up to 35% in debt. This strategy ensures that if there are no arbitrage opportunities present in the equities they can generate the income from the debt investments.  Arbitrage funds make money...
Read more