As a youngster, I am assuming that you will not be having a lot of resources to invest in. It is possible that you will be having limited earnings and savings. Well, in that case, the best option for you is a Systematic Investment Plan (SIP).
With SIP, you can invest a fixed amount in mutual funds over a period of time, step by step, monthly or quarterly, thus averaging your investment costs and benefiting from the power of compounding. SIP is an investment option provided to investors by mutual funds, allowing them to invest small amounts on a regular basis rather than lump sums.
Investment level typically occurs weekly, monthly, or quarterly. In SIP you can start with as low as Rs. 500 a month. It is an excellent choice for initially initiating investments. This form of investment gives you the option of investing small amounts too. So, it’s very much possible to save money monthly and then invest it in SIP.
Let's Start with an example-
Denny is a 20 years old guy and he wants to invest in mutual funds, but he has zero knowledge of how the market works.
- How to start investing or trading in Mutual funds?
- What should be the financial plans to consider investment or trade in the market?
- What intensity of the risks shall be considered?
- How to sharpen skills in investing or trading?
- Which is better- learn and become an expert and then invest or learn and invest simultaneously?
So, the answer will be for all these questions
Conclusion
Mutual funds are trending in today’s world. They bid opportunities to cultivate wealth, generate income, cash savings, and most prominently tax savings. For youngsters, mutual funds offer some incredible investments both for the long-term and short-term.
Investing at a young age is, honestly, the best way to protect the future. A small amount spent per month in a mutual fund won’t hurt anyone, right? So, stay positive and try to save money for yourself. The entry & exit points are all transparent when you start taking the initiative.
Make sure you get in touch with the financial advisor (if you’re a newbie) or choose the right investments (if you’ve gained the knowledge and experience).
For more information, you can visit FinTech Blog.
Till then, happy investing!