What Is The Importance Of Investment Planning In Your 20s

Jake Blake

Many aspiring investors are unsure when the optimal moment is to begin investing. The most appropriate response is – immediately. By starting to invest early age, one has a significant advantage – time. Investors who start investing in their 20s will get more time to develop their money, allowing them to achieve all of their financial objectives easily.

However, for beginning investors, deciding on and investing money can be a daunting undertaking, especially given the large number:

Investment options and techniques accessible

Take Risks

Their age influences the level of risk an investor can tolerate. Young people may afford to take on the risk in their financial activities because they have years of income. While people in their retirement years may prefer low-risk or risk-free assets like Treasuries and certificates of deposit (CDs), young adults might develop more aggressive portfolios that are more volatile and have the potential to deliver higher rewards.

Regular Savings Plans

Regular savings plans allow you to invest any extra money you have while still having access to it if you need it.

You typically form an agreement with fund managers to invest in mutual funds online followed by systematic investment installments, with monthly installments being the most usual.

Typically, the minimum monthly investment is Rs100. You can set your own amount over this based on your financial situation.

The fund manager invests this monthly payment on your behalf in the same way as the initial investment.

Budget It Out

Managing all of your bills on a fresher’s salary may be both daunting and eye-opening. Of course, this assumes that you no longer receive pocket money. This is why the rule of 50-30-20 makes sense. Let’s say your annual pay is Rs. 40,000. Keep half of your money or Rs. 20,000 for things like rent, groceries, utilities, commuting, and clothing.

Set aside 30% of your income, or Rs. 12,000 for savings and investments – ideally, Rs. 4000 for long-term plans such as equity funds or ELSS, Rs. 4000 for short-term or mid-term plans such as RD or liquid funds for unexpected contingencies, and the remaining amount for goal-oriented schemes such as buying a car or house or going on an international trip.

If you have debts, use the last 20% of your income to pay off your debts and EMIs; if you don’t, boost your savings or treat yourself.

Set Financial Goals

It would help if you created financial goals to realize your lifelong ambitions. You’ll be one step closer to financial security if you set mid-term, long-term, and short-term financial goals. Furthermore, if you aren’t working for a defined goal, you are more prone to overspending. Saving for retirement, for example, is a long-term objective, whereas building up an emergency fund is a short-term one.

Calculate the amount of money you will have to achieve each of your objectives. Assigning particular financial amounts to these objectives is crucial to achieving them.

Find Good Deals

There are numerous ways to save money on everyday purchases, such as clothing and food. This could entail figuring out when the greatest time is to buy linens or getting a reasonable price on a new car.

From groceries to furnishings, there are ways to save money on everything. You can save a lot of money throughout a lifetime if you make shopping for a bargain a habit.


The twenties are an excellent time to establish sound financial habits. Individuals can benefit from the financial benefits of following the simple rules outlined in this article not only in their 20s but also as they continue along their investment journey.

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