Early setting of financial goals and going in for a clear vision of future planning and investing will be your golden goose, especially as a woman!
We all have heard of the saying and quote it quite often – “ jaab jaago taab saveera” (it is a new day when you wake up); but unfortunately it may not work in all situations. Certainly not in future planning and investing! Realization of a mistake is fine; but to what level can it be amended or the repair work can be done and what cost we need to pay for waking up too late is difficult to comprehend.
When talking about investments and future planning for a better life, I would say the sooner the better. The ‘sooner’ gives you a lot of scope to experiment and understand the asset classes better, increases your risk appetite, and gives you enough time to work on your goals, while defining them with more clarity over time.
Also, starting sooner gives you an opportunity to create a parallel income source. How? Let me elaborate.
When you start making small investments regularly, without realizing, over time, the investments accumulate and start giving you interest income; and that interest income starts earning further interest on it. This compounding effect really helps you multiply your investments over time; it creates a separate pool of funds, which can then be assigned towards any of your financial goals.
Now let’s see what happens if we wake up late in our lives to future planning.
Firstly, we have missed out on a huge opportunity which time provides, where the small investments made over the years would have taken you a long way. Now the initial investment amount goes up, and so does the pressure on the assets to perform in short run, leaving you with less scope for error.
Second, you cannot take much exposure in the riskier asset class and you cannot afford any mistakes at this stage, as you have limited money to work with and huge financial goals to achieve. The lesser the time in hand, more the difficulty in future planning and investment. Whether you like it or not, you have missed the boat and you may not be able to fulfil all your financial goals and might have to let go of some, based on the priorities you set and the life stage you are in.
Third, if you are too late, be prepared to work in your old age too, because the cost of living is not coming down and you have not made provisions for the rising expenses.
So yes, the sooner you start, the better for your future planning and investments – or as soon as you have a source of income. Start early and inculcate a habit of regular saving and invest your savings in long term assets. The golden opportunity called time will do wonders for you and the money you have invested.
Understand that your goals may be vague in the beginning, especially as you may not have any responsibility yet. But the same investments can be later mapped to the financial goals you set. Once they are clearer and more defined; and the savings and investments done earlier, will make it much easier for you to achieve your financial goals later.
Invest early, invest wise!
Published here earlier.
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