Radhika Gupta, CEO of Edelweiss Asset Management Company, on Sunday shared valuable money advice for those who have just begun their earning journey. "5 pieces of money advice I would give my 22 year old self (who just started earning)…," she said in a tweet.
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With her extensive experience in the financial sector, Gupta offered these five key recommendations to help young earners make the most of their finances:
Start early
Gupta emphasized the importance of starting early on one's investment journey. She acknowledged the common tendency for young professionals to prioritize work and delay investing. However, Gupta warned against the pitfalls of procrastination, noting that delaying investments can lead to rushed decisions later on. Starting early not only allows individuals to ease into the investment process but also provides an opportunity to learn from mistakes with smaller capital.
Personalized asset allocation
Challenging the notion of a one-size-fits-all approach, Gupta talked about the age-based investment rules. She encouraged individuals to tailor their investment strategies based on their risk tolerance and circumstances. Gupta shared her own experience of choosing a more conservative investment approach due to the volatility of her career.
She also highlighted the significance of having a portion of savings in easily accessible forms, particularly during market downturns.
Embrace simplicity in investment
Gupta reminded young investors that sophisticated financial instruments are not necessarily indicative of high intelligence. Drawing from her extensive background, she revealed her preference for simple investment vehicles like Systematic Investment Plans (SIPs) into balanced advantage funds and mid/small cap funds.
Create a clear framework
Gupta emphasized the importance of establishing a clear framework for investment decisions. She advised individuals to write down their investment principles, goals, preferred asset classes, and performance assessment criteria. Having a structured framework provides guidance during moments of confusion and prevents second-guessing choices, she said.
Balance saving, investing and enjoyment
While advocating for prudent financial management, Gupta also encouraged young earners to enjoy their money. She stressed that investments should not overshadow the joy of living life. Gupta shared her own experiences of celebrating milestones such as purchasing her first luxury bag and her home. She reminded everyone that the true joy of money lies in its ability to enhance the quality of life for oneself and loved ones.
First Published: Aug 28, 2023 6:02 PM IST
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