Remember those times when you opened your lunch box in school to find your mom had put your favorite snack in it? Or those times when your dad bought your favorite pen and handed it to you just before your exams? Parents share a bond with their children that refuse to weaken over time, Indian parents, in particular! Right from deciding which career to choose, which girl to marry, and even which car to buy, Indian parents play a pivotal role in their children’s lives and influence their decisions.
The parental influence continues even when they start earning; the parents also help them on what investments to make including an unwarranted one. For them, the best youngster is one who is not ‘young and spending’, but is ‘young and saving’ – one who saves money and gathers assets one after another.
The Young and Spending
The younger generation is growing up in an environment which is completely different. As a result their priorities are radically different from the older generation. This generation does not believe in owning commodities but in simply having access to it.
The youngsters of today believe in good health and invest in it. They prefer spending on a fitness band, gym membership and personal trainer. This generation does not believe in paying huge EMIs. Instead they would buy assets when they earn enough. They prefer taking short breaks and going out on fun trips during weekends rather than struggle it out throughout the year for a big trip.
They prefer investing as and when their pocket allows. However, the older generations which invested on buying property and made savings in so called safe – traditional & physical assets, insist and often push their young earning children into making similar choices. Most times, the investment is a matter of preference rather than a well-thought out plan, creating unnecessary burden on a new earner.
Coming of age investing
This new generation of earners is often advised by their parents to get into the saving mode. And while the parents may be wringing their hands at the seemingly overspending youngsters, what they have to understand is with a transforming world economy, the saving habit also needs to change. Something this generation definitely understands. Hence, the growing shift from traditional saving instruments to mutual funds and similar easier-to-liquidate assets. An increasing number of youth is also investing in mutual fund schemes through Systematic Investment Plans (SIPs) which is easier on their pockets and can help build up a corpus for their various goals.
So, rather than putting the young in shackles, let them be free. Let them spend and enjoy their money and invest only when they are ready. Let them decide their own risk and investment appetite as per their personal goals, time horizon and priorities. After all, they are not their parents, and let’s be thankful for that!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully