Your 20s are arguably the time in your life when you enjoy the most amount of freedom. Chances are that your career has just started so you are starting to become financially independent, you may still be unmarried or without the responsibility of children, and you may be living on your own for the first time in your life. So, it’s natural to let loose and go a little crazy.
However, in the midst of enjoying all your freedom, you must also consider your future and ensure that you enjoy similar levels of independence (at least financially) even then. The best way to do so is to invest your funds in your 20s so that by the time you are older and require them, they will have grown substantially. Although the process of identifying the right financial instruments for your needs and investing accordingly may seem daunting, it doesn’t actually have to be that way. Here are a few things to consider when investing in your 20s to make the process easier:
Key things consider when investing in your 20s
1. Do you have any long-term plans?
An important thing to consider is whether or not you have specific milestone purchases planned for the future. If you already have your own home or car, then you’re probably not saving with the specific intention of buying either of the two. So first evaluate your own needs before you pick the financial instrument that suits you the most. If you do not have a home or car, and want to buy either of them, you can look at high ROI investment options such as ULIPs to make sure you can do so within a set time period.
2. What are your priorities?
Another thing to consider is your current set of priorities. If you are focussed on ensuring your spouse’s safety, or the security of your parents, then you can look at investing in life insurance policies. However, if your priorities at the moment are centred on your career and you want to be able to add as much value in the work place as possible, then saving money to pursue a degree in the future can help you reach your goals faster. In this case, a high ROI investment like a ULIP can work in your favour.
3. What are your health needs?
You may be fit as a fiddle right now but it is essential to consider any hereditary diseases that may run in your family and create a safety net for them accordingly. If your family has a history of heart disease, you can invest in health insurance policies that are designed with extra protection for heart patients. Similarly, if your family has a history of cancer, you can add a layer of cancer care to your health insurance policy to make sure that if the disease knocks at your door, you have the funds to banish it.
4. What are your dreams?
Investments are not only designed to help you deal with life’s practicalities. You can also invest your funds smartly in order to ensure that your dreams come true. Did you want to bag pack across Europe, or visit every culinary capital and eat at Michelin star restaurants? You can do that eventually if you save enough funds and, more importantly, save them smartly. Once you are older, you may have a myriad of other expenses plaguing you – your child’s education, a home loan that never seems to end, health care for your ageing parents, and so on. Setting aside the funds now itself for your dreams can ensure that nothing stops you from making them come true when the time is right.