Wealth Guide: How to Create a Solid Retirement Plan in Your 20s The expert suggests this

Wealth Guide: When we are in our twenties and entering our first jobs, we dream of a big house and vacations abroad, however, we hardly think about the idea of ​​retirement. The zeal to pursue and win is so high that the thought of managing our finances often eludes us. Fast forward to the age of 40, going through a midlife crisis and regretting not having started saving early. Akhilesh Gupta, Chief Investment Officer, Aviva India, shares his knowledge on how to create a solid retirement plan in your twenties. He says: “When I was young, I thought money was the most important thing in life; now that I’m old, I know it is” – Oscar Wilde, the FIRE movement, who stands for Financial Independent and Retire Early, has created a buzz not only in the United States but also in India.For the uninitiated, the famous movement aims to be financially independent as soon as possible so that you don’t have not to worry about money even in your old age. that, in a recent survey, 64% of young Indians are reluctant to invest.”

“Without a doubt, it’s easier to save for retirement when you’re younger and have fewer responsibilities. Just investing a little money at a young age can help you take your “Retire earlier than planned. And who doesn’t want an easy retirement? You wonder what it’s like. Here are some ways to start earlier and retire better,” he suggests.

Steps to Create a Solid Retirement Plan in Your 20s

talk about money

“According to the popular Chinese proverb, “The best time to plant a tree was 20 years ago. The second best time is now”. To make meaningful investments, you must have enough knowledge about it. The next step is to read and talk about money. To take a step towards financial literacy for a better future , it is of the utmost importance to start exploring and understanding financial jargon and procedures at an early age,” said Gupta.

Track and record

“To understand the nature and pattern of expenses, you need to track your expenses. This can be done through budgeting. Categorize your expense category and budget it accordingly. This will not only help you track your expenses , but also reduce unnecessary expenses and help you save more money,” he added.

Save to invest

He further explained, “As Warren Buffet once said, ‘Don’t save what’s left after you spend, but spend what’s left after you save.’ If you regularly invest part of your salary, you know exactly how much money you have left for other expenses.It will also help you become financially disciplined.The money saved could help you for a better future, by investing it in ULIP, SIP, etc. Savings also makes you feel more secure and keeps you out of financial trouble.

Power of composition

“Once you gain financial knowledge, you will realize the power of compounding. Compound interest is interest on a balance that is reinvested, therefore, you earn more interest. This is the formula for money multiplier. In the book “Financial Freedom,” author Grant Sabatier explains that the younger you are, the more time your money has to grow. “If you keep saving and investing, your net worth will continue to grow and, because of compounding, growth will accelerate,” he says. So if you start saving early, you’re giving your money time to grow and accumulate,” he said. added.

Sip while you sip

“Once you have saved your money, it is better to invest in market-linked investment instruments such as SIP (Systematic Investment Plan) or ULIP. For the uninitiated, SIP is a way of investing by which you can invest in mutual funds monthly, On the other hand, ULIP (Unit Linked Insurance Plan) is an investment as well as an insurance plan where you invest in stocks and bonds, and it generates returns closely related to market conditions. The significant differences between the two are that ULIP offers life cover while SIP does not. As Albert Einstein profoundly summed it up, “Compound interest is the eighth wonder of the world. Whoever understands it earns it, whoever doesn’t pay for it. Thanks to the power of compounding, with investment instruments like SIP and ULIP, you can insure as well as generate additional income that will help you create a solid retirement plan in your twenties. rstand the language of money and save it. Do you visualize the whole staircase, just take the first step?” he concluded.

(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)


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