What Is The Right Age and Right Way To Save Money?

Saving a huge amount of money in the long run will help you to live a cozy life. There arises a question demanding the right age to start saving money. What do you think? Is it ok to start saving from the age of 30 or late 30’s? The next million-dollar question is to find out the right ways and channels to save money. Until a decade ago, the financial instrument known to public was the bank FD and post office savings schemes. With the liberalization of the economy, people have started realizing the importance of investing in mutual funds, stocks and other ULIP products.

Ideal Age To Start Investing

Individuals who have attained the age of 17 or 18 will have the ability to start grasping things in a better way. New things can be learnt and understood faster. I believe this is the right moment to start investing. It requires an inbuilt instinct to try out various savings channels to identify the correct way to save money. One has to start studying the basic and fundamental terms of financial aspects.

Students generally do not have sufficient money to park it in FD or to make stock market investment. However, they should realize that even small amount of money such as 500 INR or 1000 INR can be invested through various channels. If they get an opportunity to see their money growing, they will never stop investing for the rest of their lifetime.

Lessons To Be Learnt

Investing earlier in the life is always bundled with lot of advantages. Not the financial advantages but if you want to see the financial advantages read Why It Is REALLY Very Important to Start Investing Early. The advantages are:

• There will be lots of lessons to be learnt in the financial industry. Young individuals will make mistakes and learn to overcome them quickly. For example, when you start investing from the age of 18, 2 to 3 years of investment experience will help you to identify the right products to bank upon. Failures will teach you valuable lessons.
• Starting the investment patterns early in life (as a student or before you start working) indicate that you have less money to invest. It will help you to trim the losses even if you make an expensive mistake.
• The individuals do not share much responsibility and they are free to test their investment ways and means to get profitable results.
• There is ample time available to test the different products available such as FD, NPS, debt funds, stock investments, mutual funds, F&O etc. The individuals can get wealthy knowledge on all these products.
• Investing earlier in life will help you to leverage the effects of compound interests earned on your investment. Those who start investing late in their life will surely miss this magical effect.

Are these reasons enough and motivate you to advice the youngsters to start investing earlier in their life? Parents should encourage and educate their children about the benefits of saving and investing in life.

So, What Is Your Plan To Invest Your Money?

The current political and economical systems do not seem to be bright and experts are keeping their fingers crossed for early Lok Sabha elections. The credibility and reliability on the government is lost and foreign investors seem to have lost their hope on India. The concentration is turning towards other BRIC countries where the government policies do not hamper growth. The GDP growth of India in 2013-2014 financial year is expected to be fewer than 5%. So, what is your bet on the stock market? Which are the companies to be targeted and which are the industry verticals to be banked upon?

Let’s take 3 or 4 industry verticals and discuss about their future in the coming year. This article does not give the exact numbers on the performance of the individual companies and industry sectors but is intended to share a common view of their expected performance in the future.

Information Technology: Industry body NASCOM predicts the growth of Indian IT industry to be in the range of 11 to 12%. I am sure this is not enough for the every hungry IT players of India. TCS and HCL Tech are the companies to be watched and the latter company is expected to perform better. TCS has already reached it high levels in the past and the proportion of giving back profits is expected to be better with HCL Tech. Infosys will bounce back but not immediately in the near future.

Auto Sector: Bajaj and Tata Motors are credit worthy companies who can return a decent profit number to the investors. The two wheeler segment will find a better growth rate when compared to its bigger rival – 4 wheeler segment. The growth in the car sales is expected to be muted for the next one or two quarters. This segment really needs the attention of the government right now. Bajaj is strong with its fundamental growth story for the past 3 to 4 years consistently.

Real Estate: It is surely going to be thumbs down for this reality market. The interest rates are likely to be reduced for the housing loans but experts are not sure whether this move will trigger the numbers for the home sales. The prices are inflated in this reality segment and people are cautious about buying a second property. The number of unsold houses in metro cities such as NCR Delhi, Gurgoan, Mumbai etc is rising. Infrastructure developing companies will find it hard to raise funds for their projects. It is definitely a challenging year ahead.

Banks: My bet would be on Yes Bank and Kotak Mahindra because of their improving numbers of customers and profit rates. Yes Bank seems to have a strong foothold of corporate customers while Kotak is trying to reach out to the every possible area of wide spread cities.

There are several other industries to be watched for this financial year. I am sure a calculative move will help to yield better profits. If you are not really sure about investing in stock market directly, you can choose NPS as a potential tool to craft your strategy of investing.