We have heard it one too many times that Age is just a number. On many counts, it actually is. Be it marrying or having a family, checking off travel lists or running that marathon, everything is being done in 30s & 40s, and perhaps better than what 20s would allow us.

However, there is something that is better done in 20s and procrastination to 30s or later, will impact the results one will see. INVESTING in the 20s can give a major heads up to your financial well-being. It not only helps create a greater corpus but can be essential in living debt-free.

Why 20s

• Investments grow with time. Starting early ensures ample time is given for power of compounding to work. Investing even a small amount every month in 20s could give that extra boost to your wealth.
• Investing regularly at this age will soon turn into a habit. Before long, you will accept the fact that a portion of your income goes towards your investments.
• When you start late, you may not be able to keep aside a high amount given the share of family expenses would be high.

What should you do in 20s, 30s, 40s and 50s?

Each is an important milestone for us personally and professionally. Your financials should also progress as we enter new milestones. Here are some top achievable for each decade to stay ahead instead of a catch-up in the game.

In 20s

• Develop financial quotient: Gather all the intelligence possible. 20s is a great phase to learn so even making mistakes is allowed.
• Keep expenses low: While enjoying freedom, keep a check on outflows.
• Consider investing in Equities: Since you have time on your side, consider investing in equities if you are comfortable with short term volatility. They tend to give better returns over long term.
• Start a Systematic Investment Plan: SIPs are a great way to benefit from the power of compounding. SIPNOW!

In 30s

• Don’t be a slave to debt: Sometimes, taking loans are inevitable. But we should avoid financing smaller purchases like durables. If we must avail a loan, it should be paid back at the first opportunity.
• Start retirement fund: Plan your retirement starting as early as 30s so you don’t have to worry about falling short of goals later or give up a certain part of your lifestyle after retiring.
• Set goals for Education: To fund children’s higher education, start saving as soon as they are born.
• Pursue other dreams: Because you started investing early, you are in better shape to pursue your passion projects.
• You should also continue to invest for other goals.

In 40s

• Save as much as you can: For most people, this is the time when they reach their peak incomes and their expenses stabilise, so save and invest as much as you can.
• Maintain the right asset allocation: A considerable portion of your portfolio could still remain in equities since it’s still a long way before you retire.
• Make retirement savings your main goal: This is the time to pad up your retirement funds. You can dedicate a large chunk of your investments to enjoy the so called ‘evening of life’.

In 50s

• Stay away from loans: Aim to close all your loans before you retire. Though it may become imperative to take education loan for kids but avoid it as much as possible or keep the tenure as short as possible.
• Shift portfolio to lesser risk: When you are closer to goals, you have to safeguard the gains you made, due to an early start.
• Post retirement plan: Start planning for how you would invest your portfolio post retirement to ensure that your investments are aligned to work best for you while you enjoy your retirement life.

Ensuring a sound financial future is not impossible but time is of essence. Starting early will minimize the amount you have to save for your goals. Just as they said, “Early bird eats the worm”.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.