Have you started earning yet? What about Savings and Investments? Do you think you are too young to start saving and investing? Is there even any defined age to start investing?
Let's discuss it in detail - one of the most crucial topics of our life, yet understated for a long time.
I started to earn when I was 24 years old (the actual bank salary I mean). I used my 1st salary to buy gifts for my family. Then the 2nd one to buy me an iPhone. And I think I used another 2-3 salaries to enjoy and spend on my wants (not needs). Was it the right decision? I VOTE NO!
We go crazy when we get our first few salaries. We can't demand everything from our parents. So when we get our own salaries, we feel the need to splurge on things we have always wanted. Just like I did. And then the savings and investments start late. We don't realize but by then, we lose a lot of time.
A lot of people ask me why should we save so much. We have our medical insurance in place to cover any medical emergency. Apart from that, some savings for the education of the child and some more for any bad times should be enough. Then why to invest a bulk of our salaries?
A very simple answer to this question is - financial freedom. If you want to work till you live (with a need I mean), you are on the right path. Just keep some for emergencies and spend the rest of it. But you can't retire any day in your life with this pattern. If you invest correctly from the right age, you get to be financially free and independent very early in your life and thus retire (at will) and relax and travel and enjoy for the remaining portion of your life.
By this I don't mean we don't enjoy our early years, they are the best time to enjoy. But not at the cost of investments. No matter how much we feel that life is short and we should enjoy the present and blah blah, life is not that short indeed.
So when should we start to invest?
Start right from your first salary. It could be a meager amount, you can still keep a lot of it to splurge and buy gifts but a portion of it should be invested. Subsequently, when you have met your wants, increase that percentage. Eventually, at least 40% of your salary must be invested. That's when you should sit a little relaxed.
We don't realize this early in life but trust me, the ones who do are the ones who are at the top right now. And we just keep thinking how they made it to that spot.
Happy Weekend!
