For financial security and success, it is important to create an investment portfolio according to every stage of life. The goal during early adulthood is to invest for financial growth, given that income is less than future needs. Investment is risky but gives significant financial benefits. Mid-life requires a balance of stability and growth, with investments primarily in real estate, bonds and other stable growing investments.
As retirement approaches, the focus shifts to income generation and capital preservation, with a heavy allocation towards more stable assets to comfortably meet day-to-day needs post-retirement. Adjustment and rebalance are important at every stage of life.
Where to invest money at the age of 20 to 30
People aged between 20 to 30 are at the initial stage of their career. Earnings at this stage are relatively less. Earning youth prepare themselves for financial growth. Financial planning done at this stage gives benefits in later years. There is more risk taking at this stage of age. In such a situation, earning youth can take the risk of investing.
Swati Saxena, Founder and CEO of 4 Thoughts Finance, says that at this stage of age, it is important to master the basic principles of personal finance, which will help further in the future. Mutual funds, ETFs, stocks are some of the investment options for earning youth. Better returns can be achieved by investing money in these. She suggests that some strategies to follow while investing are the 50:30:20 rule, where one spends 50% of one’s earnings on fulfilling everyday needs, 30% on fulfilling one’s desires and The remaining 20% is invested in savings and investment options. During the initial years of career, focus should be on financial growth and savings.
