Money Mistakes: The age of 20 to 30 is the most decisive years of life. This is the time between the speed of career and the new responsibilities of life when the foundation of investment is laid. But, this is also the period when many financial decisions go in the wrong direction due to hasty or lack of information. There is talk of 10 such common mistakes, which can be overwhelmed to the youth in a long time.
1. Late Start
At this age, expenses like setting career, repayment of education, walking or marriage are important. In such a situation, investment is not given priority. But due to this delay, the biggest advantage of compounding is missed, which is the basis of large returns in the long term. The beginning may be small, but the initiative taken on time can be far more effective.
2. Wish for early profits
Crypto, options trading or double returns schemes attract some youth. There is a quick profit here, but the risk with it is equally big. Such steps without strong financial base can lead to loss, especially when the entire fund is installed in such high risk products.
3. Investment in the same place
Some people rely only on stocks, some just mutual funds or some only real estate. But if that one sector declines, the entire portfolio is affected. This is the reason that it is considered necessary to spread investment in equity, date, gold and other asset classes.
4. Investment without target
When it is not decided what purpose the investment is being made, it becomes difficult to choose the right product and maintain the necessary discipline. For example, if the goals like buying a house, retirement or children’s education are set, then planning can be done for them according to the right time and risk.
5. ignoring tax
Short term or long -term capital gains tax on selling stocks or mutual funds are missed several times. Also, while choosing tax saving instruments, it is not seen whether they will benefit in the old tax system or in the new. The result is that additional tax has to be paid instead of savings.
6. Lack of emergency funds
If you miss the job, come to the medical emergency or the income stops due to some other personal reason. In such a situation, if there is no immediate cash provision, then investment can be sold in loss. This is the reason that it is considered necessary to keep the cost of at least 3 to 6 months in a safe place before any long scheme.
7. Trust on wrong advice
Investing without deeply testing can be risky without being inspired by social media, YouTube or friend-relatives. It has often been observed that trending investment options become popular without only discussion without any solid banking, but do not live up to expectations later.
8. Understand yourself late
As soon as he crosses the age of 30, it is late to think that it is late, removes many people from investment. The truth is that investment can be started at any time, provided it contains regularity and understanding. If good earnings have started at the age of 30, then investment capacity is also higher, which can prepared a large financial base in a short time.
9. Not reviewing
After starting SIP, it seems attractive to leave it like ‘set and forgate’, but with time neither the goals remain the same nor the ability to take risks. Therefore, it is considered necessary to review the portfolio from time to time, so that changes can be made as per the need.
10. Forgetting investment on yourself
Doing courses, increasing skills, focusing on health- these are all investment that indirectly improves earning and decision ability. But often people consider it expenses, while this future can become the strongest source of income growth.
Also read: Financial Freedom: How much money is needed to spend a comfortable life … 10, 20 or 50 crores?