Why complicate it making mistakes? Life is best enjoyed, when you keep things simple. Money is easily made when simple mistakes are avoided. You have to take responsibility for your financial decisions and correct any financial mistakes you have made, if you want to grow rich.
Your parents are rich. You have lived off them, for many years. They looked after all your needs in your childhood. They catered to your whims and fancies. You just had to ask and there it was. The lovely toys. The rich food. They admitted you to the best schools and colleges. They paid your food bills, medical expenses and also your leisure expenses, even when you were in college. The secret parties. The Goa holidays. Even the brand new laptop and the latest smart phone, which you did not need. All paid for by your parents, when you were doing your MBA.
Well….This is all fine. You got a job after MBA. Unfortunately, the pay was less. Your parents continued to finance all your indulgences, even after you got a job. Well….you just couldn’t stop living beyond your means. You changed jobs…Second Job…Third Job…Your parents still pay your bills. Food and Medical Bills…Party Bill…Holiday Bill…The list is long. You are into your third job and still, your parents pay the bills, because you just can’t live within your means. Will you ever be financially independent?
Finally, a guilty conscience. You want to save. You are an MBA after all. How difficult can it be? There is only one problem. You need a new phone and laptop every 6 months. Clothes and parties eat up your money. You just have to break your fixed deposits and sell your shares, to buy those costly gadgets and finance those parties. You just cannot save for the long term. Your savings will grow only if you invest in financial instruments for the long term.
The best time to invest in equity (shares and mutual funds) is when you are young. You can afford to lose money when you are 20 or 25 years of age. After marriage you have other commitments. You just cannot afford to lose money after marriage. Equity, especially over the long term, is the best investment you can make. You can at least expect a 10-12% rate of return if you invest in equity. No other financial instrument can give you such high returns, over the long term.
Remember: An investment in equity carries risk. You need to learn about equities before you make an investment in them.
SEE ALSO: Basics of Financial Planning
You were the top scorer in MBA. Sure getting good marks is great. But it is not the real thing. To learn to ride a bike, you have to ride it, in the traffic. You learn to invest, by making an investment. You might burn your fingers initially, but you will soon learn the tricks of the trade.
Invest when you are in your early 20’s and learn the ropes. Your money will grow and you will soon be on the path to riches.
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