How To Manage Finances If You Are Single?

The youth of today earn higher salaries enabling them to make intelligent investment decisions from their early career. When you start early, you are able to enjoy financial independence and security. However, most early 20s youngsters do not consider saving and investments one of their top priorities. Their financial freedom, education loan burden, and the long horizon before their responsibilities commence are the reasons

Power of compounding

Compounding means that returns on investments (ROIs) are reinvested to earn higher returns. Although it may seem low, over the long-term the power of compounding allows individuals to accumulate huge wealth. The longer one remains invested, the higher your wealth increases.

More risk appetite

Investments such as equities or mutual funds are able to deliver higher returns. These are risky investments because of their exposure to market volatility. However, an individual in his early 20s generally will not have too many responsibilities and is able to assume higher risks to earn greater returns. As life progresses, marriage, children, and other responsibilities increase, which reduce the risk appetite of most individuals. Therefore, youngsters are recommended to open a demat account online and start investing today.

Higher retirement corpus

It is important to start planning for retirement early in life. This gives sufficient time to individuals to build a good retirement corpus, which ensures their financial freedom during their golden years. When a person begins early, he will need to invest a smaller amount to build the desired corpus. However, as he grows older, the investment amount increases, which may result in financial difficulties. Using the Systematic Investment Plans (SIPs) route to accumulating mutual funds in the demat account is recommended to build a good retirement corpus.