It may sound cliche but time is the most valuable asset, and investing in your twenties can play a significant role in your financial success in later age. Money invested in the 20s could be compounded for decades. Radhika Gupta, CEO of Edelweiss Asset Management Company has shared five ‘money tips’ for those who have just started earning. In a tweet, Gupta wrote, “5 pieces of money advice I would give my 22-year-old self (who just started earning)…”.
2. Right asset allocation
Gupta suggests that young people, who are in their early 20s need not have to be 100% or largely equity because they have time on their side. “Everyone needs some liquid contingency money in debt…so choose the asset allocation that works for you. I really believe the best one is the one that doesn’t let your money sleep during the day but doesn’t stress you enough to eat your sleep at night, in tough markets,” Gupta said.
3. Simple investments
Gupta believes that simple products do not take away from your intelligence quotient. For Gupta, the best investment is a SIP into a balanced advantage fund and a mid/small cap fund. According to her, ” If someone wants you to lock in your money, you better be earning a serious premium and have a real reason for doing so”.
4. Right your goals
For investing early, Gupta advises to write goals and principles first. “What you would invest in and why. What you wouldn’t invest in and why. What is good and bad performance,” Gupta in her suggestions suggested to think of money holistically.
5. Enjoy your money
Lastly, Gupta said that saving and investment are important but enjoying that money is also crucial. “Spend it on things you like, on little joys (like my first LV bag) and big joys (like my home). Investing is about fulfilling goals and living a better life, not a competition to win,” Gupta wrote. Being a CEO of a mutual fund house, Gupta said there is a limited joy a NAV can give you. But things like, “buying your parents a car, yourself your first watch, your child an amazing education, your first family holiday,” will ultimately bring greater joy.
“A redemption when used to bring a smile to someone is a good one,” she concluded.
Recently, Gupta revealed that she has started a systematic investment plan (SIP) for her nine-month-old child Remy Gupta Moniz.
“We (My husband Nalin Moniz and I) started a SIP for Remy in 2022 when he was just three months old. As his guardians, we can act on his behalf and manage the SIP till he turns 18. Remy has invested in a passive large and mid-cap 250 fund, which gives him broad exposure to the growth of the Indian economy. This investment can help us have a more serious conversation with him on investments and finances when he grows up,” Gupta had told Mint.
She said that about 60% of her allocation is in balanced funds (70:30 equity: debt mix), 15% in mid and small-cap funds, 15% in international funds (combination of developed markets and emerging markets), and 10% in alternatives. Her alternative investment is through an alternative investment fund managed by Edelweiss AMC and small holdings in a couple of startups.
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Updated: 28 Aug 2023, 01:40 PM IST