Are you excited about joining your first job? You definitely deserve celebrating this milestone. It’s worth enjoying the achievement. Yet, it is utmost essential to convert this state of ‘financial independence’ to ‘secure financial future’. Now is the time to take steps towards healthy financial future.
Get habituated with financial discipline right from the time you draw your first paycheck.Take these 3 crucial financial steps to let your money grow and help you reach all your money goals of life.
Make A SIP: Set some percent of your salary aside, regularly, for saving and investing. Investments do not mean big money projects involving huge corpus or lump sum. Even small investments reap huge benefits in the long run, provided you direct them to the right channels.
If you start investing INR 5,000 every month into SIP/Systematic Investment Planning, from the age of 23, you could accumulate INR 1 crore by the age of 53, assuming 10% rate of return. With a regular investment of INR 5,000, every month into SIPs from the age of 33 would yield INR 38.3 lakh by the age of 53, assuming 10% rate of return.
|Age||Monthly SIP Investment||Rate of Return||Expected Return At 53|
|23||INR 5,000||10%||1.1 Crore Rupees|
|33||INR 5,000||10%||38.3 Lakh Per Annum|
So, make the best use of both time advantage and the power of compounding.
Get Right Insurance Portfolio: Add insurance policies to your kitty. At the young age, you many not foresee the health issues that come up in the future. But, hospitalization and health issues come up anytime in life. If you are not ready with your health insurance, you will have to pay off a huge chunk of your savings towards medical expenses. Else, you will have to borrow money, thereby getting into the vicious debt cycle. Moreover, getting an insurance at an early age allows you to pay lesser premiums, compared to buying a policy during the latter years.
Also, consider other insurances like disability insurance, term insurance policy, etc. In simple, getting the right insurance portfolio helps you get covered and face any uncertainty.
Build Your Emergency Fund: An emergency is a sudden, unexpected life event that causes emotional and financial distress. And the emergency fund is a fund built gradually and used to meet an emergency in life. Experts suggest to build an emergency fund with at least 6 months income and park it in right places, offering liquidity and growth.
In conclusion, it is essential to make the best use of the money you earn, right from your first job to build a secured financial future. Get more assistance from personal finance from online experts like ArthaYantra, a fiduciary that assist you with getting started.