Investment needs to be planned early
The main challenge for young people in their 20s for financial problems is how they spend it on spending on new experiences, rather than saving for long-term needs.
Your 20s is a transitional age from adolescence to adulthood, where you have full authority over yourself, have a job and can support yourself, have no dependents or installments, and want to enjoy the results of your work effortlessly and buy new experiences.
But don’t forget that mature and well-established finances need early planning. The fulfillment of lifestyle is the main factor that makes it difficult for the younger generation to manage finances.
Fulfilling the lifestyle is endless. You have to think about the future and chase the dream of having an established financial plan.
The difference between saving and investing
Saving is the process of saving money for short-term needs/goals that can be withdrawn or withdrawn at any time. For example, you want to vacation abroad next year. Periodically you will save in the bank with a certain amount of funds according to the departure target. But in the middle of the road, if you have emergency needs and need additional funds, you can withdraw or withdraw your savings at any time.
Saving in the bank has a low risk with low returns. If your goal of saving is to expect greater growth in the value of money, you should consider investing.
Investment is the process of developing the money you have to get more profits. Because it has more benefits, the risk is also greater. But don’t worry, there are many investment products with a low level of risk for the type of investor who tends to be careful.
If you save your money you can take it or withdraw it at any time, it’s a different story with investment. Investment in financial planning is long-term in nature and requires a process and time to disburse it. But as a form of investment, investment is very useful for your future.
Why should young people invest?
1. Creating a new source of finance
Investing gives you the opportunity to add value to your money. It’s different with saving, where your money will just stay in the bank and won’t add value.
2. You can chase your dreams
Dream of owning a house? Starting your own business? An investment of $50 fake ids can help you to realize your dream goals. The funds you invest will generate additional money from the interest earned. From this additional income, you can “enjoy” life doing the things you want, for example traveling, continuing education, or capital to build a business.
3. Preparing for old age
There will be times when you have to retire and quit the world of work. Of course, you have to prepare a source of income when you are no longer productive. If you invest from a young age, you can enjoy the investment funds and benefits when you retire. The value of your money will continue to increase over time.
How to start investing?
Each age level has different financial needs and demands. Therefore, the selection of investment products must be done carefully according to age and needs.
1. Develop long-term plans and goals
By knowing when you want to make a profit, you will know how much money to spend and the type of investment product you should take.
2. Set the number of funds you want to invest
The percentage of the number of funds that can be spent on investment ranges from 20% -40% of the income earned. You have to make sure that your primary needs are met before investing.
3. Choose investment products according to financial goals
Choose investment products with risks that suit your character and your abilities and funds.
There are 2 types of investment for beginners for millennials:
First: Investment in real assets or tangible assets outside the financial sector such as gold, land, or properties such as apartments for rent.
Second: Financial assets in the financial sector where there is a commitment to tie assets to securities issued by the issuer. Examples such as stocks, deposits, and bonds.
Choose investments wisely and according to your needs and abilities. Investing doesn’t have to be all about money either. In financial planning, there are two concepts. The first is defense, where we prepare investment provisions and self-protection for the future with the income we have; the second is offense, where we look for ways to improve skills or choose investments to increase income.