We all want a hefty amount for our retirement but you benefit more from savings when you start early. So, if you start saving from your 20’s you will of course have more in your kitty than in your 40’s. This will give you an opportunity to make the most out of time and also retire with confidence. While the money may be tight at a young age, one thing that they have is Time and we all know that Time is money.
First, let’s see the benefits of saving early;
- Power of compounding: Compounding in simple terms means earning an interest on your interest i.e. earning on your earnings. Let me make it simpler with an example. If you invest just Rs. 500/- every month, for the next 40 years at a fixed interest rate of 6% p.a., by the end of 40 years, you have invested Rs. 240,500/- and you have earned a compounded interest of Rs. 718, 482/- so the total money you get at the 40th year is a whopping Rs. 958,982/-. Isn’t that simply amazing? Keep one thing in mind, the longer you stay invested, the more you gain. To further understand the magic of compounding, read here.
- Ability to digest the market fluctuation: When you invest early, any drastic fluctuation in the market gives you the cushion of time to recover back. But if the same happened when you are saving for your retirement and also paying for a mortgage, child’s education, and car loan, it would be a hard road to recovery.
- Being prepared for life: Life is all about unexpected surprises. An unplanned vacation, a change in career path, or a medical emergency may change your financial outlook and when you start early, you have the ability to handle these changes without altering your financial goals drastically.

Young adults have a high-risk appetite as their age works as a shock absorber. With more years of earning ahead of them and time in hand, they can venture into investing in riskier options and have an aggressive approach towards their investment to earn more gains.
So now lets us also see the options of saving those young adults can explore.
Equity Shares: Let’s first understand what Equity Shares is. Equity means having a share in someone else’s pie. So here, the pie is a company that’s listed on a stock exchange, and when you buy a share of that company, you have got yourself a share in that pie. As a young adult, the investment should be concentrated on growth-oriented assets in order to attain higher returns.
Markets can be volatile, you may gain 10% in a year and the next year, you may lose 20%, like in the current times when the market saw a dip due to the COVID pandemic. But a young adult has a lot of time by their side to weather the market fluctuations.
But Equity market requires gaining some knowledge and understating of how it works and from where to start before you take the plunge. Many online portals and channels have tutorials and videos to help you learn. You can also learn and understand the markets and other investment avenues with the help of L&T Investment Ki Paathshala. Click here to know more.
But for a person who wants to invest in Equity and doesn’t understand the nitty-gritty of it, has one more option.

Mutual Fund: So, as I said above, if you don’t understand the nuances of Equity trading, you can rely on Mutual Funds. The main advantage of a Mutual Fund is that it is managed by professionals. First, identify the sector you wish to invest in, like Real Estate, Pharma, or Oil & Gas. Now, search for Mutual Fund in those sectors. Compare the returns of these funds and start investing with SIP (Systematic Investment Planning). To understand how SIP works, read here.
You can feel more protected with a Mutual Fund as you have someone with experience and understanding of the markets managing your money. Also, in Mutual Fund you get a diversified portfolio as the money is parked in multiple company shares and not just a single company, hence diversifying the risk. For example, you wish to invest in growing businesses, you can invest in mid cap or small cap funds which is a high-risk fund investing in many mid cap or small-cap companies which are in the early stage of their development and have the potential to grow. Always have the habit of reading the scheme related documents before investing to understand the scheme type, investment patterns and the risk factors associated with particular investments and consult your financial advisor to understand the implication of any investment.
Quoting a famous quote by Warren Buffet, the man who grew with the stock market and first invested when he was just 11years old, “The Stock Market is a device for transferring money from the Impatient to the patient.” So, start investing early and be patient with your money. Allow it to grow with time and reap the benefits later. Invest what you can and when you can and always make it long-term.

Happy Investing.
Disclaimer: This information is general only and does not have regard to the particular needs of any specific person who may receive this information. L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates; does not guarantee/indicate any returns/and shall not be held liable for any loss, expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisors before investing. The recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
30 replies on “Financial Tips Every ’20s must know”
There are a lot people who have missed the 20s bus. I’m keen to learn about the strategies they can adopt.
Hey… sure this post will come up soon too. Stay tuned.
Those are some great tips to follow when in 20s. My nieces and nephews who have just started working and are new to finances will benefit from your blog. Will share with them.
In Finance, the more information we have better it is. 20s is the age when most of us start their first job and knowing about the cashflow is very important to make wise future decisions.
These are some great tips on saving early and one should know in 20s. I am sharing with my nephew. This will definitely going to help him.
I feel sorry for myself for never taken my finances seriously when I was in my twenties. I wish we had done some planning then to have a good corpus now.
I was saving but didn’t invested. But am planning to do it now. Your post came at right time. Will check properly and decide.
Oh that’s great. Hope my blogs help you in some way.
The tips are great. It’s better late than never. If we educate Kids about finance it will always be helpful.
Thank you. Anything that you start early gets you better benefits in the long run. So educate them early
Absolutely bang on. I wish I knew these tips when I was in my 20s. I think financial awareness should be taught in schools and universities.
Savings is a very important habit that needs to be inculcated from an early age. There is so much to plan for financially, and more so with inflation rising, Mutual funds are always a good bet.
Absolutely some habits are worth having and investing is one of that.
Power of compounding,mutual funds ,PPF and saving more than spending are all excellent tips for starting a happy financial future
You know all of financial investments are my biggest weakness buddy and your post undoubtedly has enriched me buddy
If I had known all these in my 20s I would have saved a fortune by now. Your post will surely lead many teenagers and youngsters towards the right path of saving.
Handling their finance should be taught to the teenagers so that they could start making the foundation of their future at a young age.
Starting with finances early, surely help a person. Better late than never and selecting the right plan is a motto right now. Shall share this post with cousins in 20’s
Financial knowledge is a must for every person and I am so glad to read such well researched and informative post, which is going to help a lot.
I save every year for my children’s future but I now want to learn and understand the markets and other investment avenues via L&T Investment Ki Paathshala. Thanks for the recommendation.
I am sure financial investment and knowledge from an early age is a must and ’20s is a perfect time. Though I learned a little late in life and have started with mutual funds investment.
I had missed on many things but I’m learning them now and yeah they r helpful.
Absolutely financial planning should be done at the right time. This post help a lot in kids education financial planning
Absolutely financial planning should be done at the right time. This post help in doing financial planning with proper approach
Though I am well into my thirties, I still don’t know many of these things. Thanks for the article. It was worth reading. Will forward to my female friends as well.
These are awesome tips for any age. The compounding factor in any investment is so powerful and one can really make it work in their favour if they know and understand it well.
Those are some great tips to be followed for investing and saving. Worth a read,
5. It’s good to start early. I am in my late 20’s and I realize the importance of savings. I’ve known friends who have been doing this for a while now, and are reaping the benefits of it. There are a few new-age mothers in my circle, who have inculcated the habit of savings in their children from as early as the age of 10. I look forward to reading your blog for someone who is just about to enter their 30’s.
Your article is such an eye opener! Money should definitely be invested wisely. Sip is great.
[…] Save and Save: In my earlier blog Financial Tips ever’ 20 must know, I had mentioned about the importance of saving from an early age. With regular income and returns […]