Millennials are the generation of people that have reached their adulthood in the early 21st century. Millennials were always at the centre of every change that happened in the last few decades. Currently, millennials are the largest working community with significant income sources to invest wisely. That’s why they understand the importance of investing in the early stage of employment.
Unlike previous generations, millennials have various investment options available, and one of the most important among them is Mutual Funds. According to a study, around 360 lakh new investors have invested in Mutual Funds in FY 2028-19. Millennials are directing their incomes to invest in Mutual Funds in order to let their corpora grow over the long term.
Many studies have suggested that investment at an early age is the best ways to attain financial independence as early as possible. If you are a millennial and thinking to start investments, here are the reasons why should you do it at earliest.
The more money you invest, the more savings you build for your future. Saving from an early age helps you to gather more savings over time. Besides, when you begin investing at an early age, you develop good habits like cutting unnecessary expenses and divert saved money towards investment.
Increased recovery time
Investments are subjected to market risk. Generally, investors require a significant amount of time to recover from losses, which can be difficult when you are in later stages of your life. On the other hand, you get more time to recover from the losses when you invest from the beginning of your professional life.
Time value of money
When you invest in systematic investment plans (SIP) from early ages, you can reap significant benefits over time. This eventually increases the time value of money. Investing your money in SIP or mutual funds enables you to afford things, which might be unaffordable for people who do not invest. Thus, the earlier you invest in SIP or mutual funds, the better it is for you.
Financially secure future
Financial emergencies are an inseparable part of life. Be it sudden home repair or a broken-down car; everyone encounters urgent financial requirements at a certain point of life. In times of need, the funds you gathered by investing from early ages come to aid.
Developing the ability to take risk
Starting investment at an early stage gives you a brief idea of market risks involved in it. Though the mutual funds carry certain amount of risk, the more the risk, the more are the rewards. Thanks to computers and smartphones, a lot of information regarding investment is available at your fingertips. You can use this information to do research and take calculative risk while investing your money in SIP or mutual funds.
Lastly, investing in the initial stage of your career enables you to attain finical stability until you reach your retirement.