What are some must-know financial tips for students?Add Answer
The investment strategies have changed over the years from just a piggy bank to the investments in post office schemes or savings bank account. However, now we have more avenues available where we can do smart investing and earn better returns than the traditional post office/bank investments.
As the students are dependent on the stipends received from parents or some of the students do some part time jobs to take care of their education, they can start micro investments in mutual funds. The investments in mutual funds now can be done with as low an amount as Rs.100 per month.
The returns in the mutual funds over a long term period is very attractive. On an average a mutual funds schemes have delivered 16.5% CAGR over a period of 15 years. To give you an example, an investment of Rs.1000 per month for 15 years has made Rs.7 lakhs. The more you keep invested, higher the yield be. If we continue the investment for 20 years, historically the data confirms an average CAGR of 18%…do you know how much it means in rupees….its wooping Rs.19.26 lakhs and even if we assume CAGR of 16.5% it would still be Rs.15.98 lakhs.
So, I would recommend all the students to start micro SIP in good funds and reap benefits. Start investing early so that you retire at 40 and enjoy all the luxuries of the world when others are still struggling.