You should start investing as early as possible so that you can enjoy the actual magic of –Rule of compounding investment.
The more benefits and greatest advantage that you will investing as early in “Time”.
The early or sooner you can start investing, the more in time you will have for your start investment to make them grow and to make them compound.
Where to invest depends on where your place in your life series currently, and your investment selection or strategy in you life will be depend on that.
As you come closer to age of 60s, it will becomes necessary for you and most of us, the investment in corpus which we had done and accumulated so far is now invested in a safe place. We always cannot take vey high risk on our money!
So the question is how to start Saving..?
Look at your current spending habits : Know what are your priorities. Do you want to spend new clothes every month, on eating , and movies or other entertainment? If you are doing so, that is fine if it fits your on prioritized list. If it not the case and you are in just spending money because of someone in your relative or friend circle or your friend will have habit of doing same, then always try to limit your current expenses.
Always you need to decide on your goals: As when you start your earning some money, decide on your decided goals.
If you have a goal for a higher education or for a professional degree for your own career, if you may had a goal for having your car in next 5 years or say for a home in coming next 9 years. Unless if you decide what you are wanting to do in next coming years and what are your expectations in your life, you will not be talented to plan & attain them.
If you are in your age of 20’s
If you are in your age 20’s, you are a probably enjoying with the utmost freedom you’ll never be know. You have been graduated from your college and you are moved on to the next stage of your coming life.
You may be not had any more responsibility as such right now. You are be single, you do not have to think forward about the loan now, or to have children to care for.
Lot of a ways, in this decade of your life represents an era of our untroubled wonder – in the last of your decade you’ll have to before you take on the outdated roles and responsibilities of others human being, like your own parents did for you.
This will offer you a chance so to set yourself up in life, investing in your 20’s this may sound boring, but starting at young age is easy the best way is to get ahead in life.
If you are in your age of 30’s
Once get in you age of 30+ bracket, preferably you should be able to commit more savings from your present income.
Once you are in age of 30 years, you would have a responsibility for your child’s day to day need and you need to have separate financials plan for your own children.
But ideally you should increase your savings at this age.
It means that when you are investing for a long periods of time, you can start earning interest on you investments interest.
Below is an example of how compounding interest can convert small your small savings in to a large numbers.
Just imagine that you are in a 30 years old and your love having a coffee at a most reputed coffee shop which will costs you Rs 2,500 pm.
One day you wanted to opted to drink at your neighborhood Tea stall shop instead, which you like it and it cost you some where only Rs 500 pm and the remaining amount i.e. Rs 2,000 you will need to aside and invest at the rate 12% rate of interest for 20 years.
You can estimate how much would you can accumulate after time of 20 years?
Its around Rs 25.7 Lakh!
Still your desire that fancy coffee?
There are simple formula which can make you rich. Start in saving and in investing more than early for your define high priorities goals like children Education, your Retirement etc.,
Once you are in your age of 50’s
Once you are in your age of 50’s, you are came to the end of your working life schedule, and now preparing for retirement. You should always re-evaluate your existing portfolio and make up plan for your time which has lost.
For this point you might may think that you want to have everything to have guessed out. However, you can might want to have consider again balancing your own accumulated investment portfolio, considering current inflation and your own living expenses.
What we need to do at this age;
Consolidate your life savings and put in more on savings and try to rebalance your own portfolio. Re establish your life style. So, how that you can recalculate that on how much should I should save every month from my Salary.
My personal experience on this is that you absolutely be in saving a minimum of at least 10%, but you should be more on targeting for more than 25%+ as your current income up.