7 Things your millionaire friend isn’t telling you about money

7 Things your millionaire friend isn’t telling you about money

For most youngsters like you in your twenties; experiencing and enjoying new-found life with friends partying, splurging on food and wine, gifts, gadgets, late nights and lifestyle is where the ‘highs’ of life lay.

And why not! There is a different level of adrenaline and dopamine rush to go for it more and more.

Life’s motto for most in your 20s is to ‘work hard and party harder’. Years go by without a care in the world as the money keeps flowing in to feed your wish-list of instant gratification.

Financial planning is generally not on the list of priorities for you.

It is only when you get to know from your sources that one or two of your bum-chums have become millionaires by the time they are in their late 20s or early 30s, that makes you derisive as the news seems to be a ridiculous surprise.

That is perhaps when the alarm rings in your mind and you start thinking as to where you went wrong when all were hanging in there together till yesterday.

How is it that few peers and kins are now successful and wealthy youngsters when you are still stuck in a rut with a job you enjoy or perhaps don’t and have not progressed much in your career or in money matters?

The good news is that it is not too late and you still have time. Suggest you change your mindset from ‘being derisive to being curious’ to learn and understand what your kins or bum-chums did differently to become money-wise successful early in life.

In this article today, we will focus our efforts to detail the 7 money practices that help youngsters become millionaires earlier in life which millionaire friends do not speak about.

Practice #1:


1) They budget their expenses:

Most millionaires are known to live well below their actual affordability – to the extent that you might doubt their millionaire status.

There are a large number of them who live in their ancestral homes, drive their family car, shop at thrifty Kirana/ departmental stores – looking for best deals, watching out for online deals and eating out on special occasions only.

This makes sense. Doesn’t it? None of the first-generation millionaires you see today or from earlier days, have been heard to have grown rich by spending money.

They have learnt their money lessons well ahead in life and saving and investments are things they would swear by.

These habits are worked on and developed for years and they would not barter it for any amount of luring towards anything on earth.


Mistakes Millennials make: 

While a millionaire saves first and then spends, youngsters like you do the opposite. They spend first and save whatever is leftover. If you too are making this mistake, know that you aren’t alone.

Most Millennials are found to push their budgets till they are broke. They exhaust their salaries by mid-month and use credit cards to see them through the remaining days.

Most are found to fall prey to revolving credit as they would have no clue on the interest charged on your cards, nor would you know your due dates!


Investment lesson learnt

Make a monthly budget. Draw an excel sheet with a detailed list of monthly earnings and expenditures for every month.

Your monthly expenses ideally should consist of repayment of education loan, living expenses including rent, groceries, utility bills, local conveyance, medicines and miscellaneous expenses.

Ideally, your miscellaneous expenses must be restricted to a lower percentage of your living expenses, rent and loan repayment combined.

However, if it is otherwise, you need to take a hard look at how you can make adjustments to cut costs as the first step to financial planning.

For example, some millennials love to begin their workday with a Cappuccino from Starbucks that costs INR 300. With 22 working days in a month, it adds up to INR 6,600 monthly expense!

If you stick to this habit for 30 years, your opportunity cost lost will stand at INR 11.40 lakhs. Surprised? This is because just INR 500 rupees monthly investment in a systematic investment plan (SIP) for 30 years could earn you INR 11.40 lakhs return at a modest 10% compounded annual return.

Whereas you can make your favourite cappuccino at home for just about INR 7 a day!

In fact, if you are yet to get married and shoulder minimal financial responsibility at home, then you should follow the 50:30:20 rule on your take-home salary for effective money management.

Here is the breakdown for you –

  • 50% of the money should go into loan repayment, rent, utility bills
  • 30% into savings and investments
  • 20% on discretionary spending as desired


Here is the complete article on How you can invest using a Budget or with less money as well

Practice #2:

2) They pay off debts aggressively

All young millionaires around you know that you pay as high as 40% interest on your credit cards in India.

No legal investment gives you this high returns on your money!

Your educational loan too does not come cheap. The interest rate hovers around 10% and 14%.

Thus they pay off their debts aggressively. This is because money saved on interest is money made.


Mistake Millennials make: 

Most of you love flashing your credit and debit cards when partying with friends.

Middle of the month when your pockets run dry due to high lifestyle expenses, it is this plastic money that helps you fulfil your desires.

This leads you to live beyond your means and you like most of the youngsters get into the vicious debt trap laid by the banks.

And you keep wondering that though you are paying your ‘minimum amount due’ every month, why is the actual amount due not going down?

Maybe you are also borrowing money from your successful friends too – thus increasing your burden of debt.

All these and more eat into your disposable income which you could have fruitfully invested towards your wealth creation.


Investment lesson learnt:

Arrange to aggressively pay off your debts/ loans.


Few steps to follow –

  1. Take a stock of your total outstanding debt in the market.
  2. Check for the balance overdue and interest rate for each credit card
  3. Take a stock of outstanding loans in the market like educational and personal loans
    1. Check their interest rate and term
  4. If required use a Debt Pay-off Calculator freely available on the internet to see by when all your debts will end.
  5. Give the banks auto-debit mandate basis calculations on point no. 3 for clearing all possible debts at the earliest date stipulated by the calculator.
  6. Stop using the cards for the time being. Revisit your budget vs. expense sheet to check where you can cut your expenses without majorly harming your living for the month.
  7. As and when you receive and extra income in the form of gift money, incentives, bonus, extra income from some source, interest on the maturity of fixed deposits, etc., ensure you use the whole money to check for any outstanding debt anywhere and use it to pay it off for good and also divert some amount to create an emergency fund and other important goals.


Remember interest saved is equal to money made. This will increase your disposable income.

Also remember that outstanding credit or EMIs missed or failed to pay off debts, etc.; all add up to your bad ‘credit score’ which will act as a deterrent when/if you wish to avail of any loans, like a home loan, even years down the line.

Next steps:

  1. Keep a maximum of 1 or 2 credit cards. Use only 1 of them. Keep the other away for emergencies only.
  2. Set a reminder on your mobile phone/ desktop calendar for you to ensure you pay off the total outstanding for the month at one go on or before the due date.
  3. Use the credit card for payments only in an emergency or when on business travel.
  4. Use cash to make your payments most of the time. Hard cash going out of your hand has a psychological impact on making you cautious of the money spent.

This is one of the most important money lessons for any youngster like you.


What every Indian in their 20s should know about their money? Read complete article here


Practice #3:


3) They have done their financial planning

All ‘financially successful’ youngsters in their 20s you see around you; know their financial needs and goals to ensure effective money management.

They have done this with the help of professionals who are adept at financial planning for beginners.

Once the financial planning is done; there are enough options of investment for beginners to choose from best suited to achieve their financial dreams.

Hence efficient allocation of funds following the 50:30:20 rule can easily be achieved to cater to all needs with élan. And they can peacefully devote their time and energy to work for career development and growth.

Mistake Millennials make: 

For the large number of youngsters in their 20s, financial planning seldom features in their priority list.

Realisation perhaps dawns only when they face untimely personal exigencies like death or disease of the earning parent(s) or in the face of their marriage when they suddenly realise they need to shoulder all financial responsibilities of the family going forward.

They are seen to grapple with things having lost their peace of mind.


Investment lesson learnt: 

Procrastinating financial planning leaves your dreams for the future compromised and you will not live enough to regret it. To complete your financial planning today.

To plan your finances best suited to your needs, you will need to assess and consider various parameters ranging from your age, financial dreams/ responsibilities, life stage, time to maturity,  investment capacity, risk appetite, etc.

Yes, we agree that financial planning for beginners can look confusing at the beginning.

Thus we urge you to take a quick financial planning course at Koppr to get empowered with the required knowledge on the subject.

In case you need further clarification, feel free to connect with our experienced team at Koppr.

Here’s a STEP by STEP process to create a financial plan for yourself



Practice #4:


4) They started investing early towards their financial goals

Successful millennials make choices differently compared to their peers. Instead of spending mindlessly on things of little value, they choose to embark on their journey into investments for beginners early in life to become millionaires by the time they are in their 30s.

They learn about the financial planning for millennials and make equity and equity-related vehicles their best friends to invest in. This is simply because you have time on your side. And time is money.

Time has the power to compound money and make it grow exponentially in the long run.


Mistake Millennials make: 

Most youngsters like you are found to either be scared to invest, remain in two minds or invest too little.

Even if you manage to overcome the unreasonable fear of the equity market and have designed a nice investment portfolio, if you do not save/ invest enough; going along with your dream to become a millionaire will remain unfulfilled for sure.

After all, ‘a penny saved is worth more than a penny earned.’ There are many high earning people around who still struggle with their money and lack even a decent bank balance.

Again there are many who have been known to have accumulated a decent amount of wealth with just good income levels.


Investment lesson learnt: 

Procrastination has many perils you won’t live enough to regret. So start investing today.

Even if you begin with tiny amounts, you will be surprised by the substantial wealth you have created over a period of time.

This will any day be phenomenally greater than never to have started investment at all. Let us take an example for a better understanding.

Example: Say you wish to accumulate INR 2 crores by the time you are 60 years old; i.e. 35 years from now. You have 2 options with you.


Option 1:
Starting at 25 with a modest 10% compounded annual return you will need a monthly investment of only INR 5500 to achieve your dream INR 2.11 crores wealth in your account (with a total investment of INR 23, 10,000 over 35 years).


Option 2: But if you start saving say at 30, with the same 10% compounded annual return you will need a monthly commitment of INR 9500 for 30 years to achieve the same dream amount INR 2.17 crores (with a total investment of INR 34, 20,000).


Thus the cost of waiting for just 5 years will cost you INR 9, 10,000 (39% more) to achieve the same targeted wealth!

This is an example of the magic of the power of compounding when you have time on your side. Worried about your opportunity cost lost?

Get in touch with your personal financial planner by downloading the Koppr App and start your investments today to maximise your wealth too!


Watch the video on power of compounding



Practice #5:


5) They have secured their basic needs

Even before you commence your financial planning, you must first secure your life for your family members with health insurance and a term life insurance cover.

Your successful friends are aware that any insurance policy; whether it is on health or life, comes really cheap when you are younger and enjoy sound health.

These assets get costlier with age and deteriorating health.

Ever rising costs of medical treatment and rising uncertainties of life in terms of death, disease and disability; make a health insurance policy for self/ family and an adequate life term over on self absolute must help to ease the financial burden in the face of exigencies.


Mistake Millennials make:

Most of the youngsters in their 20s feel that you are too young to consider a health and life cover for yourselves.

In fact, you realise the need very late in life when either you see a family member/ friend suffer financially for the want of money due to the untimely death of the bread earner, or when you face financial crisis in the face of medical exigencies for yourselves.

Worse case scenarios observed today are that realisation dawns when millennials in their mid-30s have become obese and/ or developed some lifestyle a disease that makes purchases of a health and life insurance policy really expensive in your pockets.

Sometimes insurance is also denied for diseases you harbour! Have you measured your opportunity cost of waiting too long?

Buy unbiased health insurance to secure you and your loved once from Koppr


Investment lesson learnt:

If you have realised the opportunity cost of not covering these basic needs, consult your financial planner today on Koppr App and get the best-suited plan for health and life insurance, without any further delay.

This would make you a responsible and respected youngster who stands tall to protect your loved ones financially in the face of health and life exigencies in future if any.


Practice #6:


6) They use tax-savers to the maximum limit:

Young millionaires are known to be prudent enough to understand and maximise usage of tax-saving instruments to the maximum limit to optimise their returns.

They understand that tax saved is money earned.

Hence you will see that their EPF, PPF and NPS accounts are optimally fed to build their long term retirement tax-free/ efficient corpus. These investment options are also known to yield the highest interest among debt instruments.

They also optimise their 80C and 80D tax benefits with investments in Equity Linked Saving Schemes and Health Insurance plans respectively, repayment of interest on Education loans gets them to benefit u/s 80E, and interest on home loans u/s 24, among others.


Mistake Millennials make:

Youngsters in their 20s like you are known to be impatient and mostly lack interest in learning about avenues to save maximum tax to optimise returns even on debt instruments and/ or assets they can invest in.


Investment lesson learnt: 

Talk to your HR and/ or your financial advisor and learn all the ways and means you can use in a financial year to save the maximum amount of tax and optimise your returns.


Practice #7:


7) They are always in search of avenues of extra income

Your successful friends have an insatiable thirst for alternate sources of income to add to their earnings and wealth creation.

They pick up weekend consulting assignments, contractual projects, and/ or work gaining an audience in the areas of their expertise on social media by sharing knowledge/ skills. Yes, ‘Audience’ is the new currency today.

To be able to have a sizable audience on social media as an influencer by captivating people’s attention gives them the ability to generate sustainable income. This empowers them to even ‘make money while they sleep.’


Mistake Millennials make:

While most Millennials are energetic about the work they do, they may not be diligent or persevering in nature in most cases.

Most get swayed into ‘work hard-party harder mode’ – thus losing out on the opportunity or the willingness to put in the extra effort to use their knowledge and skills to generate extra income.


Investment lesson learnt:

Opportunities and scope are endless for the youngsters with the right attitude/ intent, knowledge and skillsets.

You just need to open your horizons and find out those avenues of making more money to help you fulfil your dream of becoming a millionaire too.

So what are you waiting for! Contact Koppr and start investing today.


Find latest banking and finance news including stock news insurance news, personal finance and more only on Koppr App. Download Now!

How to Invest With Less Money or Within a Budget?

How to Invest With Less Money or Within a Budget?

While financial freedom excites every youngster when in your early 20’s, financial planning or wealth creation is generally found to be mundane at this age.

Rightfully so because your focus then is mostly on repayment of debts like educational loans, managing living expenses, discovering newfound city life, partying with friends, buying gifts for loved ones, latest gadgets and accessories, etc. The wish is to live life king-size with newfound financial independence.

Flashing of the plastic money shimmering in the wallet gives a different high to most at your age too. In the process, some of you tend to go overboard and spend beyond your actual income at times.

This is simply because living on a budget is not thrilling at all. Result? You land up making money mistakes and the consequences could be draining and long term. The wrong notion about financial freedom may lead you to this situation.

Financial freedom has different degrees to it; the most coveted one is when you have enough money to cover all your living expenses without you having to work for it anymore.

You are free to do what you feel like doing without worrying about earning money to meet your ends.

Naturally, other than those born with a silver spoon in their mouths and with large inheritances, most of us will mostly spend all our lives accumulating such kind of wealth, if at all.

However, the brighter side of the story is that you can still achieve a decent degree of financial freedom well ahead in life and feel liberated if you start saving and smart investing with small budget in your early 20s itself.

Yes, you do not need a huge income to have spare money to set aside for savings and investments aimed at wealth creation. Just start investing with little money as a habit every month to accumulate a decent fortune over a period of time.


Is it Possible to Invest with a Small Budget?

This is possible because you have time on your side. Remember- ‘all investments are like little children; they grow better with time.’

Time has the power to help your money grow and compound itself to accumulate your much-desired corpus over periods of 7, 10, 15, 20, 30 years; in short, in the long run.

There are various investments for beginners that can help you build extraordinary wealth in future even if you start with disciplined small investment ideas in your early 20s.


But is it really important to Invest? I am so young!

Till about four to five years ago, young performers at the workplace could vouch for good job opportunities in the market and yearly salary increment as well.

However, over the past few years, the Indian economy is not doing well resulting in a crisis in the job market that has been made worse by the Covid-19 pandemic.

While youngsters are finding it difficult to get a suitable first opportunity for themselves, the youth in their 40s and above are losing their jobs and are being replaced by resources at a lesser cost.

To top it all, the past year and a half has been the havoc job loss in India contributed to by the ongoing pandemic. This has left the salaried class shaky in terms of career and income opportunities irrespective of their ages.

This makes financial planning and investments in your early 20s crucial to make sure your money works for you and help you tide over any unforeseen financial exigencies in life.

Just before beginning with the invest, ask yourself this 5 Questions for Personal Financial Planning

What should I do then? How to invest in 20s?

There are options galore for investment for beginners. So start investing with small investment ideas / options having clarity of your financial goals. This will ensure your wealth accumulation simultaneously with an increase in your income.

However, before you do those, you need to put some checks and balances around few things –


Check #1:

Track your Credit Cards: Even before you prepare your monthly income vs. expenditure statement, you must take a look at the bunch of credit cards you use. Do you have an account on how much you spend on each one of them?

What are the payment cycles for your cards? Are your cards clear of their debts? Or have you fallen prey to revolving credit?

Are you aware that you pay interest rates as high as 40% on your cards in India?

No investment assures you that high returns ever. Thus paying off your credit card debts will ensure you have this valuable little money at hand to invest and make it work for you every month.


Mistake to avoid:

  • You do not need so many credit cards – it is just a feel-good thing. It is prudent to keep just one credit card for travel and the convenience of payment.
    • Ensure you set a reminder on your cell phone to clear your credit card dues on/ before time every month.
    • Auto debit mandates make payment of credit card and all other utility bills seamless and prevent any late fines/ interests.


Check #2:

Do I budget my expenses: While we agree that there is no thrill in living on a budget, we know that the benefits associated with making a budget outnumber an otherwise habit.

Thus make a list of your income and expenditures for a month. The difference will give you the amount of money saved. If your monthly “miscellaneous” expenses are as high as the sum of your loan repayments, rent and utility bills, groceries, medicines, etc., then you should definitely take a closer look at the former list to check for items you can live without to divert the amount into a fruitful investment for beginners.

Remember, if you are single with little financial responsibility at the moment, you should ideally follow a 50:30:20 rule.

Those who achieve financial freedom early in life have been seen to wrap up their complete living expenses within 50% of their monthly income.

You should ideally save/ invest at least 30% of the income and can look at spending the remaining 20% per your free will!


Mistake to avoid:

Most millennials have no concept of savings in their scheme of things. They spend their money on free will without a thought for tomorrow. By the middle of the month, their accounts run dry in many cases.

Credit cards and loans see them through the rest of the month. Hence they have no money to save/ invest for the future.


Check #3:

My Basic Needs: Smart investing with small budget is the key when on a budget. So if you are wondering how to invest in 20s, then you must first consider investing in a health insurance plan and a term life insurance plan before thinking about anything else.

This is because the younger and healthier you are, the cheaper these policies are in your pocket.

With age and deteriorating health, both these investments in insurance get expensive for the nature of the investment.

Going through the ongoing Covid-19 pandemic must have made it clear why having a health insurance cover is a must for both the young and old.

The unprecedented rise in health care costs makes health insurance a must-have irrespective of where you are in the country and even if you are covered to an extent by your current employer.

A 5 lakh cover will cost anything between INR 3000 and 7000 a year (comes to INR 8 to 19 per day) for a Gen-Z in their 20s (source policy bazaar.com).

You must also consider taking a life term cover of at least 22 times of your annual income in your twenties as permitted by IRDA to protect your loved ones from any financial burden in the face of uncertainties like death, disease and disabilities.


Mistake to avoid:

Millennials and Gen-Z have this notion that they are too young to get health insurance and/ or life insurance coverage on themselves.

They do not think about it till such time they either get married or are required to shoulder serious family responsibilities due to the untimely demise of an earning parent(s).

Thus it is strongly advised that if you feel responsible towards your parents and/ or planning a family shortly, book your Insurance Planning appointment with Koppr today!

This would save you and your loved ones from financial distress in the face of any exigencies.


Check #4:

My financial goals: Planning any investment for beginners requires an understanding of the financial goals of the investor. So what are your financial goals?

Most youngsters are seen to invest in an off the shelf retirement plan as their first investment without putting much thought into it.

Remember if you are on a budget and wondering how to start investing with very little money for you to choose the best investments for low budget; you will need to consider various parameters that will help you determine your financial goals and make a financial plan best suited for you.

These parameters can range from your –

  • Age,
  • Life stage – single or married, with/without a child,
  • Financial dreams you wish to achieve in life,
  • Timeline you have to see your dream come true,
  • Investment capacity and
  • Risk appetite, etc.

Mistake to avoid:

Not having the ‘big picture’ of your life defined is one of the biggest mistakes youngsters make in their 20s, simply because ‘you will have to see the ball to hit it’ towards your destination.

A clear roadmap of life goals helps to plan the finances judiciously, even if the budget is small to start with. Achieving any milestone takes a lot of effort and focus.

To help you plan your finances and your financial goals/ needs, learn about easy financial planning. For further query and support, we will be happy to help you.


Check #5:

Create Emergency Fund: If you are reading this article you are definitely lucky to have survived the ongoing landscape-scale global crisis created by the Covid-19 CoronaVirus.

Goes without saying you have realised how uncertain life is.

So is work and career. Thus to mitigate unforeseen financial exigencies arising out of medical contingencies, job loss, etc., an emergency fund will surely come to the rescue, especially if you have education and/ or other loans on you.

You should ideally have about 6 months of salary in your contingency fund. To build this fund you would just need to siphon off a part of your monthly salary through an auto-debit mandate into a separate account for a chosen period of a few years.

Recurring deposits and FDs too are often used to build emergency funds to tide over future financial exigencies.


Mistake to avoid:

Youngsters in their 20s are generally in denial of any emergency/ exigency that they may face. It is as if for the rest of the world, but not them.

As a result, they would choose to spend more money in wining and dining out or splurging on upgrading the latest gizmos.


So whenever you have a strong urge to update your gadget or give in to impulse buying, because it is a ‘cool thing to do/have’, we urge you to Stop. Step back. Think. Act. i.e. Stop before making the final decision.

Step back and think whether you actually need the thing. What is at stake if you don’t own it? Can this purchase be deferred? Then Act judiciously and with maturity.

Having said that, it is natural that a youngster like you will still get influenced by friends when you see them splurging and spending money and partying in the name of enjoying life.

But if your objective is to achieve financial freedom earliest in life, you will need to act differently.

That will help you lay the foundation for a brighter financial future compared to others in your batch. Remember you will still have at least 20% of your income to spend the way you want!

Read our 5 top reasons on Why you should start investing in yours 20’s.


Earning Rs 30,000 Monthly? Here’s How to Invest & Plan Your Money with Rs 30,000 Monthly



How to start investment with small amount?


1) Choose Risk for Return

There are various options for investment for beginners. Given you are in your 20s, you have time on your side.

Time is the most important ingredient that can help your money multiply manifold if you choose to invest in equity or equity-related instruments. These instruments are known as ‘high risk – high return’ vehicles that are known to build wealth over time as they are capable of beating inflation, unlike most of the other debt instruments.

The best thing widely appreciated about Gen-Z and late millennials is your risk-taking capacity and your desire for continued learning and application.

Whether in making a career choice or otherwise, your risk appetite is generally much higher than in earlier generations. Moreover, you would be mostly single with lesser financial responsibilities, maybe just wedded without a child at the moment.

Thus investments in equity and related investment options would make an ideal choice for you.

These investments can comprise direct equity/ stock/ shares, equity mutual funds, ETFs (exchange-traded funds), SIP in stocks and mutual funds compared to low earning debt instruments.

SIPs (systematic investment plan) in equity mutual funds can be your first best bet.


Let us take a look at a scenario to check how allocating a budget on mutual funds can help you in your wealth creation.


Scenario #1:

Recurring Deposit vs. SIP Say, you invest INR 2500 in a Recurring Deposit in a bank for 10 years, earning you a 5.5% ongoing interest rate.

So total monthly investment would sum up to INR 3,00,000 in 10 years that will earn you a total interest of INR 1,00,048 at maturity. The total maturity amount would be INR 4, 00,048.


Refer to the table below.

RD vs. SIP Recurring Deposit SIP in Equity Mutual Fund
Instalment amount INR 2500 INR 2500
Term of investment 10 10
Term to maturity 10 10
Rate of interest/ Return 5.5% 10%
Total amount deposited INR 3,00,000 INR 3,00,000
Total interest/ return earned INR 1,00,048 INR 2,16,000
Maturity Amount INR 4,00,048 INR 5,16,000


On the other hand, if you invest the same amount of money for the same term to maturity in an equity-based mutual fund as an investment for beginners, your total yield would stand at INR 5,16,000 at maturity.

Return considered is at a modest 10% where on average the return varies between 10% – 12% compounded annually.

The good thing about any SIP is that irrespective of the market fluctuations, the law of average gets applied to your investments to get you above-average returns from the market.

This surely makes SIP a much better choice of investment for beginners.


2) Choose Long Term

Given the fact that you are in your early 20s, it is natural that your financial goals like children’s education, purchasing a second home or an expensive car, a luxury vacation and retirement are more than a decade(s) away.

In fact most of the times it is seen that the goals are not very clear among youngsters of your generation.

In this scenario, if you want to know how to start investing with very little money, we would strongly advise you to think long term as none of the aforesaid financial goals are likely to surface before 7 to 10 years and beyond.

The advantage in this is that your money will get enough time to work for you in generating wealth/ corpus to your satisfaction while you can pay attention to your career development, nurturing hobbies, among other things.

You just have to ensure that you never give up on your habit of saving and investing a budget on mutual funds. Yes, SIPs in mutual funds and ETFs are excellent ways to generate wealth for those with limited knowledge of stocks and other equity investments.

You have a diversified portfolio managed by dedicated fund managers that helps you minimise your risk even though you are exposed to equity-related investments; only because you have chosen to invest for the long term.

Refer to the table below.


Scenario #2:

Say you are 20 years old today. A SIP of INR 2500 in an Equity Mutual Fund for 7 years at the rate of a 10% return yields a return of INR 3, 05,000.

However a SIP for 10 years gets you a return of INR 5,16,000; and the same fund, if kept in the fund for 20 years without further feed, maturity amounts to INR 13,98,000, against an INR 3,00,000 investment.

And, say if you feed your same SIP for 20 years at the same rate, and leave it in the fund for 30 years from today, your corpus stands at a whopping INR 51,82,000 against an investment if INR 6,00,000 only. Such is the power of compounding!

Isn’t this magic unfolded!

SIP in Equity Mutual Fund SIP in Equity Mutual Fund SIP in Equity Mutual Fund SIP in Equity Mutual Fund
Age Age 25 years Age 30 years Age 40 years Age 50 years
Instalment amount INR 2500 INR 2500 2500 2500
Term of investment 7 10 10 20
Term to maturity 7 10 20 30
Rate of interest/ Return 10% 10% 10% 10%
Total amount deposited INR 2,10,000 INR 3,00,000 INR 3,00,000 INR 6,00,000
Total return earned INR 95,000 INR 2,16,000 INR 10,98,000 INR 45,82,000
Maturity Amount INR 3,05,000 INR 5,16,000 INR 13,98,000 INR 51,82,000


Best part of such investment for beginners and others in general is that it provides you with the liquidity to withdraw money against units as required without having to break your investment.

With investments in multiple SIPs, you are sure to get enough support to fulfil your goals or wealth creation for various long term financial goals in life. SIPs in ETFs to yield good returns.

And did I also tell you that you can start a SIP with only INR 500 a month! Isn’t that a great opportunity to start investing today!

As your income increases or you get incentives and annual performance bonuses, you can also start buying a few stocks of companies that are fundamentally strong; as they too are known to accumulate wealth over long periods of time to help you live your long term financial dreams.

Remember equity investments yield the best return in the long term.

However, you should not invest and forget about these investments. Rather you must keep a track of your investments and consult with your financial advisor from time to time to review your portfolio as the market fluctuates between high and low.

Sometimes you may need to reallocate your funds between stocks, funds and bonds to maintain and safe keep your returns.

You can learn more about financial planning and ways to monitor your investments download Koppr app on Playstore


Learn more about the power of compounding


3) Tax saved is money made:

In case you are a risk-averse person and/ or have some financial goals to achieve within 10 years, then there are various debt and equity-related instruments to invest your money in.

It is wise to choose instruments that will also help you save on your annual tax burden. A few of such investment for beginners is –

  • Bank fix deposits – it earns you an exemption amount invested U/S 80C if the term is 5 years.
  • Public Provident Fund – it can be maintained with a minimum annual investment of INR 500. It has maturity after 15 years but there is liquidity after 7 years. Principal invested is tax-efficient U/S 80C and gets you about 7.1% tax-free interest.
  • Equity Linked Savings Schemes (ELSS) – a tax-efficient mutual fund option with maturity in 10 years. It has a lock-in for 3 years as it is tax-efficient U/S 80C.
  • Debt mutual funds and bonds – they generally get you better returns than bank FDs and perform best when the equity market falters. This is because the debt and equity market are inversely related.


All these make it obvious that there is no foolproof method to wealth creation. However, in order to build wealth in the long run, you need to be disciplined and keep investing/ saving regularly, even if the amount is small to start with.

You also need to have basic knowledge of financial planning and financial instruments to enable smart investing with small budget on a regular basis once you have a solid action plan.

This knowledge will support you to consult with your financial advisors and engage in knowledgeable discussions around your investments so that over a period of time you will be in a position to manage and monitor your investments independently. No need to get any formal degree in financial planning for that.

However, to enhance your knowledge of financial planning, you can just spend some time on the Koppr app and do a quick online course on Relationships and Finances to kick start your journey towards building wealth right from your 20s.

Find latest banking and finance news including stock news insurance news, personal finance and more only on Koppr App. Download Now!


Escape the World of Being Broke in Your 20’s & Become Extraordinary with these 4 Steps

Escape the World of Being Broke in Your 20’s & Become Extraordinary with these 4 Steps

Wealth creation is usually not on your priority list when you are in your twenties. More focus lies on career building, exploring new restaurants, enjoying party life and paying off the student debt etc.

The twenties are the time when you ‘make many mistakes and learn’. These could be financial mistakes also. The most common mistakes are spending beyond your means, living off your credit cards and not tracking your money. When you are in your twenties, living within a budget is no fun.

But it’s surely better than finding yourself in a financially stressed situation later in your life.

As you are in the early days of your career, you may think your income would not be sufficient to save for the long future. You have debts to pay off and you need to take care of living expenses which would leave you with little money to save.

But, do you know the twenties are the perfect time for you to build wealth? Because you have time by your side.

Time has all the power to grow money. No matter how little you save, you can build a significant corpus for the long-term when you start investing it in your twenties.

Saving in your twenties inculcates the disciplined saving habit in you which sets your finances on track for the future years. Time helps your money grow with compounding effects.

Before we move ahead to know how to get extraordinary in building wealth in your twenties, let’s first understand the common mistakes that millennials make during their young age.


Common mistakes that you make in the 20’s

1. Spend more on lifestyle upgrades

What most of us look up to in our twenties is keeping up with the people around us. We feel everyone else is having a good life, spending more on lifestyle.

Not creating a budget and spending plan is one of the biggest that you make in your twenties.

What to do?

Have a clear money budget for the month and track it properly. You can have a clear idea of your spending habits. This is how you will figure out where you can save. You can also use any money apps to keep a track of your spending as well!

2. Excessive use of credit cards

Credit cards surely provide financial flexibility and are a valuable tool if used wisely. In your twenties, you would prefer a credit card for every expense and shopping as it comes in handy, easy access to money.

Not using credit cards wisely and piling up debt due to this is one of the biggest mistakes that you make in your twenties.

Did you know? Credit cards have the highest ever interest for not paying on time!

What to do?

Limit your credit card usage to a maximum of 50% of your monthly income so that you can easily repay it on time.


3. Not having adequate insurance

When you are young and healthy, it is quite common to go without life insurance and health insurance coverage. Many millennials and Gen Z buy insurance only for the purpose of saving tax instead of understanding the product completely.

Not having adequate insurance coverage, both life and health insurance is one of the biggest mistakes that you make in your 20’s.

What to do?

It is important to know that any health emergencies can make a dent in your pocket and deplete your savings.

If you are financially responsible for anyone or plan to have a family in the recent future, opt for a life insurance plan immediately.

Not having adequate life insurance coverage can leave your family financially disturbed.

Book your Insurance Planning Appointment with Koppr today!


4. Starting a family without any financial plan

Many people get married and start a family without any proper financial plan, which is one of the major financial mistakes that they make in their early life.

Wedding, pregnancy and raising a child requires proper planning on a financial front.

What to do?

Download the Financial Planning Guide from Koppr today. If you have any queries, do feel free to reach out to us.


5. Not setting financial goals

Achieving any milestone in your life takes a lot of time and effort, which requires you to have a clear roadmap for the same.

Not identifying and setting up a financial goal may you leave clueless about your future. If you have to buy your dream car, home or for your later years of life, it is important to be focused today.

Not having a clear goal is a major mistake that you can make in your early earning life.

What to do ?

Plan your finances by choosing your Priority and Life Goals.


6. Not creating an emergency fund

Unforeseen emergencies can pop up anytime during your life. It could be any medical emergency or losing a job, etc. As soon as you start earning, it is important to set aside money for emergency purposes.

However, most people do not understand the importance of creating an emergency fund. This mistake of not creating an emergency fund can land you in debt traps and financial distress.

What to do?

Keep a minimum of 6 times your monthly expenses as your emergency fund.

It is a natural human tendency to get influenced by peers.

All you see at that age is people around you of the same age spending more money and focusing more on career and relationships.

If you want to become extraordinary and build wealth for your future, you need to choose your own path. All you need to have is a strong foundation to start building wealth when you are young.

You can be an extraordinary investor just with these four crucial steps.


Here is the The Ultimate Beginner’s Guide to Invest & Grow Your Money in 20’s. Read Now!


Four Steps to Start Building Wealth Now

Step 1: Make risk your friend

Be it a career or your financial life, the twenties are the age to let yourself free to take some risks.

Some of you would have just started your career and are single or some of you would have just got married and started a family. As you would have little or no responsibility on your side, it’s a perfect time to take risks and explore what the world has to offer for you.

When it comes to your personal finance, investing in your twenties gives you the benefit of time and compounding which allows you to take risk as the downturn if any can be covered over the long term.

It would be ideal to allocate a significant amount of your savings towards high-risk and high-return potential investment products like equity mutual funds, stocks and exchange-traded funds etc. instead of investing in low-risk conventional investment options.

Let’s take examples to understand how taking a risk in your twenties helps you in building wealth over the years.

Scenario 1:

Let’s say you are investing INR 3,000 per month in a bank recurring deposit for 10 years. Let’s assume the recurring deposit offers you an interest rate of 5.5% p.a.

Your total investment into a recurring deposit account would be INR 3,60,000 over 10 years and you would be earning a total interest of INR. 1,20,000 on your investment.

That means the total value of your investment or the maturity amount of your recurring deposit would be INR 4,80,000.


Scenario 2:

Let’s say you are investing INR 3,000 per month in an equity mutual fund through a systematic investment plan route for the next 10 years.

That means, your total investment would be INR 3,60,000 over 10 years. Let’s assume, with many market cycles equity funds deliver a return of 12% CAGR, you would be earning a total of INR 3,37,017.

That means, your total earnings would stand at INR 6,97,017.

Let’s say you continue to invest in a systematic investment plan for 20 years, you would invest INR. 7,20,000 and your total investment value would be INR 29, 97,444 at the end of 20 years assuming the fund continues to deliver the same rate of return.


Step 2: Invest for a long haul

When you are in your twenties, your goals may not be very clear to you. You may be sure about certain goals such as buying an expensive car when you are thirty or you are sure to go on a luxury trip in the next five years.

Certain long-term goals like when would you exactly need money for your children’s higher education (especially when you are single or newly married), when would you want to retire, etc.

Millennials today may also be facing uncertainty in the job market. However, this should not stop your habit of investing.

The best way to invest in your twenties is to invest for the long haul, which is for your goals that are decades ahead.

In this investment strategy, you may miss out on excessive gains, but you would be able to earn modest gains without being affected by any short-term fluctuations in the market.

It is important to understand that the market always fluctuates between good and bad. When you constantly track the market and accordingly buy/sell, then you are most likely to be hit badly by the market downturn.

If you are investing for the long haul, you will be able to ride out a down market more effectively. This does not mean; you should invest and forget for decades.

Constant review and pruning your portfolio is also important alongside keeping your long haul investing strategy.

For example, you have invested in a stock that was doing good and had good potential for the future. But fundamentals of some stocks can turn out to be weak. Irrespective of the market condition, it is important to get out of such stocks and revise your portfolio.

However, while you are investing it is important to choose the right type of stock, mutual fund or any investment product with a thorough understanding of the specific investment option.

You can do your own research or seek expert advice while investing.


Step 3: Learn to live within your means

To successfully live within your means of attaining financial freedom, you need to have financially responsible behavior.

To start with, you must know what your means are. You need to understand the income flow and then list out your expenses, both fixed and variable expenses. This means you need to create a clear budget and spending plan.

You need to also effectively follow your plan and stick to it. To grow serious wealth, you need to resist the urge to spend more and learn to live within your means. Do not blow your income on lifestyle upgrades.

You can choose a 50-20-30 plan for your monthly budget. This means, 50% for your fixed expenses such as house rent, grocery and other essentials and utility bills, etc.

Keep 20% of your income for variable expenses which could be for shopping online, entertainment and dining, etc. The remaining 30% of your income must be strictly utilized for savings and investments.

Adhering to this budget plan can help you save significant money and build wealth over the long run.

Enroll for our Mutual Funds course for FREE and see how you can build a wealth effectively.

Here are few good practices for you to live within your means:

1) Use a credit card wisely

A credit card is the most convenient form of interest-free credit available. If you use it wisely, you can enjoy its benefits without getting trapped in debt.

Do not rely on a credit card for all your living expenses and use it whenever it is necessary and beneficial.

Time your credit card purchases and pay your bills well within the due date.

Know a host of discounts, rewards and cashback available for your credit card to take the benefit whenever possible.
Using a credit card wisely and managing the repayment well can help you live a financially peaceful life.


Check this video out to Know why You should Own a Credit Card



2) Resist yourself from spending on materialistic things

Spending too much on expensive materialistic things early in your life holds you back from becoming a wealthy person in your 30’s or 40’s. Hence resist the urge to spend on expensive things.

For example, purchasing an expensive bike might be first on your list as soon as you start earning. Instead of going with the urge, if you wait and save for the same to buy after some years would be a financially great move.


3) Set aside an emergency fund

Setting aside money for emergencies will create an emergency fund. With this, in any unforeseen circumstances, your budget is not disturbed and the savings are not depleted.

This emergency money will allow you to pay your emergency health bills or help you live for a few months in case you lose a job, without hampering your existing savings and the monthly budget.


4) Boost your income

If you aim towards wealth creation and becoming rich, you need to focus on the opportunities to boost your income which will help you save more.

Better paying career opportunities, passive income-earning opportunities and focus more on the professional skills that can earn you extra money.

Having multiple streams of income can help you maximize your savings. There are various opportunities out there to boost your income. You just need to explore them.


Learn How you can do your Financial Planning Efficiently



5) Get your budget on track

Getting your budget on track helps you hold back yourself from overspending. Having a far-sighted vision and long-term approach is what you need to have in your twenties to have control over your spending urges.

Debt management plays an important role in your financial planning. When you have debts to pay off, concentrate first on high-interest debts. Let debt payment be part of your budget.


Step 4: Learn about financial planning

Financial planning differs from one person to another, depending on their annual income, expenses, risk-taking ability, return expectation, financial goals and financial obligations, etc. the first job is always special.

The thrill of newly attained financial freedom, weekends with friends, dining, partying and managing everything in a new city gives you no time for financial planning in your twenties.

Many may even feel setting aside money and saving for the future is tough. Some may think it is too early to save. But the fact is that the twenties are the best time to save.

And, financial planning must start as soon as you start earning. You miss out on the ‘time and compounding’ advantage that you get for early life savings. Also, keep yourself updated with Financial News by downloading the Koppr App.

For example, let’s assume you are 23 and you think you cannot save money with only INR 1,000 left after all the expenses.

Now, let’s see how much that INR 1,000 if invested monthly can benefit you over the long term. Let’s assume you are investing INR 1,000 monthly into an equity mutual fund via a systematic investment plan route.

If you continue this investing till you reach 50 years of age, you would invest a total of INR 3,24,000.

If the fund gives you an average return of 12% CAGR, your investment would value around INR 24,37,000. Isn’t that a good corpus? such is the magic of time!

That means to create wealth over the long run, all you need to do is invest regularly (irrespective of how small or big the amount is) and smartly in the right type of investment option.

To do so, you need to have basic personal finance and financial planning knowledge for long-term investment success.

Having a basic idea of investment options, the importance of financial planning and how different investment products work help you in making a smart and an informed investment choice.

It is also important to continually upgrade your financial knowledge. That does not mean you need to obtain a degree in financial planning.

You can just take a quick online course of Koppr on early financial planning to boost your financial literacy. Instead of spending on lifestyle upgrade, spend on continual mind upgrade by learning new things.


Bottom Line

There are no foolproof methods or steps for becoming wealthy.

However, realizing the importance of savings, proper financial planning and having a solid plan of action for your financial future can ensure the best start in your twenties to become wealthy in future.

Got a finance related questions? Download the Koppr App and get expert answers to your questions

The Ultimate Beginner’s Guide to Invest & Grow Your Money in 20’s

The Ultimate Beginner’s Guide to Invest & Grow Your Money in 20’s

The twenties is the time when you start experiencing financial independence. You are on your path to chase your dreams. This is the time when you start understanding the importance of various vital things in your life such as career, relationship and money.

When it comes to money, steps that you take in your 20s matter the most in attaining future goals. Investing in the twenties, no matter how small, plays a crucial role in building a sound financial future.

Smart money decisions and discipline can help you achieve financial success in your life.

The benefits of investing early in your 20s are many. Two main benefits of investing early are the power of time and the magic of compounding effect on your investment.

It is important to develop good saving and spending habits in your 20s to grow your money.

6 Steps to grow your money in your 20’s

To start investing, here is a simple investment guide for beginners or some vital tips for amateur investors


1) Create Budget and Regular Review

Budgeting helps you have control over your finances. Based on the cash inflows and income, you can categorise your expenses for the month and create a spending plan.

Actionable: List out fixed expenses such as rent, utilities and loan payments, etc. List out your variable expenses such as gas, clothing, groceries and entertainment, etc which may change month on month. When you have a clear plan, you can prioritise your expenses, plan your savings with leftover money and adjust your spending habits, if necessary.

Takeaway: It is also important to have a regular review of your budget plan to stay on track.


2) Identify and Set Financial Goals

As a career and personal achievements are the centres of attention in your 20s, financial goals may seem like the last thing to focus on. However, these are the most important goals to be set in the early ages of your career to lead a happier and stress-free life later.

Actionable: First thing is to identify and then categorise your financial goals based on the time horizon. Your short-term goals can be saving for an emergency fund, saving to pay off your student debts or for a wedding. Medium-term goals would be purchasing a car or going on a luxury vacation. Long-term goals would be owning a house and planning for retirement, etc.

Takeaway: Achieving financial goals needs a lot of planning. Luck or magic has no role in achieving your financial goals. Identifying and setting up financial goals help in establishing a concrete plan for future financial independence.


3) Set Aside an Emergency Fund

Life is uncertain and unpredictable. Unpleasant surprises like medical emergencies can crop up anytime, which may either pile up your debt or eat away your existing savings if you are not well prepared.

Actionable: Next on the list as an investment guide for beginners is to set aside at least six months of your income as an emergency fund.

Takeaway: Along with availing insurance protection, both life and health, it is important to have an emergency fund to meet immediate requirements.


4) Insure Adequately

With the change in lifestyle patterns and the rising rate of inflation, adequate life insurance and health insurance coverage is paramount for anyone before planning finances.

Planning for health emergencies and other contingencies in life is extremely important to stay on track to achieve other milestones and long-term goals in life.

Adequate protection guarantees that the family is financially secured and ensures the standard of living is not compromised in any unfortunate circumstances.


5) Plan your Investments

Once you outline your goals, you can decide on where to invest your savings depending on how far you are from achieving the particular goal.

Actionable: You can set aside some amount of your monthly savings in recurring deposits or fixed deposit or debt mutual funds to meet your short-term goals. You could consider investing in some hybrid mutual funds to meet your medium-term goals.

Takeaway: Considering your young age, you can consider investing a larger portion into riskier and potentially high-return asset classes like equity mutual funds and direct equity for your long-term goals such as retirement.


6) Track your Progress

Tracking the progress of your investment portfolio is the key to successful financial planning.

Actionable: As you are investing early, you need to keep revising your financial plan depending on your life phases. Also, as your income increases and your family responsibilities increase, you would need to save more. Your goals will change with time and many goals may get added.

Takeaway: Hence, it is important to monitor your investments, track the performance, look for new investment opportunities and review your financial planning from time to time.

Before moving towards financial mistakes you should avoid, Ask yourself this 5 Questions before Financial Planning


Investing mistakes to avoid in your 20’s


Investing early, in your 20s, no matter how small, is extremely important to create significant wealth to secure your future dreams as it leaves you with a wider investment horizon.

The most common mistake that everyone in this age makes is investing too conservatively, which is just saving aside the extra money in safer investment options like fixed deposits or just keeping it in the bank account.

Taking the right, bold and wise investment decision is equally important. Taking a considerable amount of risk as you are investing easy can-do wonders to your investment portfolio in your later years.

As you have the advantage of the time by your side, you can afford to ride out market downturns and invest aggressively.

There are many investment options available in the market for investing beginners. Depending on your goal and time horizon to reach your goals, you can consider investing in a suitable financial product.

Though you don’t have to invest in all of the investment options available, you can diversify your investments into some of the good options available and suitable for your needs.

Let’s take a look at the potential investment options available for investing in your 20s.


5 MONEY TRAPS To AVOID In Your 20’s | Money Mistakes To Avoid In Your 20’s



Potential Investment Options to Consider During your 20s

Where you invest your money should be based on your goals, the return that you are expecting and when you need the money.

Looking for different investments option but don’t know where to start from? Download Koppr App and start asking questions on different investment topics and get answers from out experts.


A) For short-term goals

Short-term goals can be something that you need to reach in the near future such as buying an expensive gadget, wedding expenses or setting aside money to pay off your student debt etc.

To achieve such goals you need to have money in liquid form. Apart from keeping money idle in your savings account, you can invest in some of the short-term investments that can yield you considerable return in a short term.

Investing in some of these fixed income instruments not only gives you liquidity to achieve short-term goals but also adds stability to your investment portfolio.

Some of the most common investment options as an investment guide for beginners are:


i) Recurring Deposits

Recurring deposits allows you to set aside a small amount each month. You have to deposit a fixed amount of money each month to your recurring deposit account for a chosen tenure.

You can earn interest at the rate applicable for that tenure, which may vary from bank to bank.

Current Rate of Interest:
Currently, the rate is 5% to 7% p.a. (1 year to 5 years and above). You can start RD with as low as INR 100.


ii) Bank Fixed Deposits

A bank fixed deposit account or term deposit allows you to deposit a lump sum amount for a chosen tenure and earn interest at the applicable rate of interest. Tenure may vary from 7 days to 5 years and more.

Current Rate of Interest:
Currently, the rate varies between 5% to 7.5% p.a. depending on the tenure chosen and the financial institute.

Term deposits are offered by Public and Private sector banks, small finance banks and NBFCs (Non-Banking Financial Companies).

You can start a term deposit with a minimum of INR 5,000.


iii) Post Office Time Deposits

Post office term deposit works the same way as bank term deposits. You can earn interest at the rate applicable for the tenure chosen by you.

You have multiple lock-in periods ranging from 1 to 5 years to choose from.

Current Rate of Interest:
Currently, the rate of interest ranges from 5.50% to 6.70% (1 to 5 years).


iv) Short-Term Debt Mutual Funds

Unlike traditional investment avenues like fixed deposits and recurring deposits, debt mutual funds are market-driven and can also offer stability, liquidity and a relatively higher return on your investment.

Mutual funds are an ideal investment tool for investing beginners irrespective of the risk appetite and time horizon to achieve various goals. There are a variety of funds available to suit your requirement.

For example, if you have an extra corpus which you may need to use in the next one or two months, you can park that money in liquid funds.

Rate of return:
The return may vary between 6% to 9% annualised return depending on the fund chosen and market conditions. You can consider low duration debt funds for 3 to 9 months away goals.

Money market funds can be best suited for something that you need to achieve in the next 12 months. The return may vary between 5% to 8% annualised rate depending on the market conditions and the fund chosen.

You can consider investing in short duration mutual funds for a one to three years period.

If you are busy to plan your finance, then here is the article which will tell you why you should Hire a Certified Financial Planner


Let’s take a look at the performance of the short duration mutual funds.


Short Duration Funds 1 Year Return 3 Year Return
Axis Short Term Fund-Direct (G) 7.90% 9.40%
Edelweiss Bank & PSU Debt – Regular (G) 7.70% 10.60%
Tata Short Term Bond Fund – Direct (G) 7.50% 6.90%
IDFC Bond Fund -STP – Direct (G) 7.10% 9.10%
Axis Short Term Fund – Regular (G) 7.10% 8.60%

( Source: Mutual Funds India: Mutual Fund Investment, Mutual Fund Calculator, Types of Mutual Funds, Top/Best Performing Mutual Funds in India – Moneycontrol)


B) For Medium Term Goals

Medium-term goals range from three years to five years. This could be saving for your children’s school fees if you are married or down payment to your first dream home.

You may not be looking for high-return investment options here. Though you can take some degree of risk, stability would also matter to remain the best for your medium-term goals.

As an investment guide for beginners, here are some investment options to consider.


i) Monthly Income Schemes

India Post offers monthly income schemes which disburse monthly income and is locked in for five years. The investment can start with a minimum of INR 1,500 to a maximum of INR 4.5 lakhs.

Current Rate of Interest:
Post office MIPs currently offer an interest rate of 6.6% p.a. Interest rates are revised from time to time.

These schemes are government-backed thus provide sovereign guarantee and steady return.

You can invest your yearly bonuses earned (corpus) into monthly income plans and then reinvest the interest earned monthly into high-return investment options like equity mutual funds and into direct equities in order to achieve your long-term goals.

For example:
Let’s say you are 25 and you have a corpus of INR 2 lakhs earned as incentive and bonus and you decide to invest that in the Post Office Monthly Income Scheme as you would need the money by the end of 5 years.

You would be getting paid interest of INR 1,100 every month for next year. Let’s assume you invest that 1,000 in an equity mutual fund through a systematic investment plan route.

You would be investing a total of INR 60,000 over the next 5 years. Let’s assume the equity fund gives a return of 12% CAGR, your total investment value would stand at around INR 82,000 at the end of 5 years.


ii) 5 years National Savings Certificate

National Savings Certificate (NSC) is a government-backed fixed income bearing scheme.

Current Rate of Interest:
Currently, the rate of interest is 6.8% p.a., subject to change from time to time. Interest in NSC is compounded on an annual basis.

NSC is a low risk and tax-efficient investment option that is suitable for small and medium-income investors. You can open an NSC account at a Post Office near to you.

Investing in the National Savings Scheme also gives you tax benefits under Section 80C of the Income Tax Act, 1961.

You can start a National Savings Certificate investment as low as INR 1,000.

For example:
Let’s say you invest INR 50,000 in NSC, you would receive INR.69,475 at the end of 5 years on maturity at a 6.8% p.a. interest rate.


iii) Medium Duration Debt Funds

Medium duration debt funds invest in debt instruments for medium-term time frames, say between 3 to 5 years. The degree of risk in these funds ranges from low to medium depending on the fund chosen and the instruments in which it invests.

Though returns are not guaranteed, they are reasonable for a medium-term tenure.

Medium Duration Debt Funds 1 Year Return 3 Year Return 5 Year Return
HDFC Medium Term Debt Fund – D (G) 10.90% 9.40% 8.80%
ICICI Pru Medium Term Bond (G) 10.50% 8.70% 8.10%
Axis Strategic Bond Fund – D (G) 9.80% 9.00% 9.00%
ICICI Pru Bond Fund (G) 7.30% 9.30% 8.10%
Nippon Income Fund – Direct (G) 5.30% 10.30% 8.90%

(Source: Mutual Funds India: Mutual Fund Investment, Mutual Fund Calculator, Types of Mutual Funds, Top/Best Performing Mutual Funds in India – Moneycontrol)


iv) Hybrid Funds

Hybrid funds invest in a combination of two or more asset classes. Apart from equity-debt combinations, part of the corpus sometimes is invested in gold and real estate too.

Hence, hybrid funds provide the best diversification to your investment portfolio.

The risk in this investment may range from Conservative to moderate to moderately high depending on the asset allocation of the fund chosen.

Let’s take a look at some of the best performing funds in the category:


Hybrid Funds 1 Year Return 3 Year Return 5 Year Return
DSP Equity & Bond Fund-Regular (G) 50.10% 12.80% 14.10%
SBI Equity Hybrid Fund – Direct (G) 46.80% 13.10% 14.20%
CR Equity Hybrid Fund -DP – (G) 45.60% 14.60% 15.80%
CR Income Saver Fund -D (G) 20.40% 11.70% 10.50%
SBI Equity Hybrid Fund – Regular (G) 45.80% 12.30% 13.30%

(Source: Mutual Funds India: Mutual Fund Investment, Mutual Fund Calculator, Types of Mutual Funds, Top/Best Performing Mutual Funds in India – Moneycontrol)


C) For Long-Term Goals

For the long-term goals that are many years ahead such as retirement, you can consider investing in high risk-high return investment options as that can provide you inflation-adjusted returns.

However, when you are planning for your finances, it is important to plan your taxes along. The tax efficiency of any investment option also needs to be evaluated to make the right investment choices for you.

As an investment guide for beginners, here are some potential investment options for your long-term goals.


i) Equity Mutual Funds:

Mutual funds are the ideal tools to invest in the equity market as you can have the benefit of professional management, diversification and a disciplined approach at the same time. The selection of funds is extremely important.

You can take a quick online free course of Koppr on mutual fund basics to learn how to invest in mutual funds for beginners.

As an investing beginner, systematic investment plans are the best way to invest in equity mutual funds as it allows you to set aside systematically on a monthly basis. You can with as low as INR 500 monthly.

Equity funds come in many types depending on the market capitalisation, tax benefit it offers and investing style etc. Some of the top-performing equity funds are:

Equity Mutual Funds 1 Year Return 3 Year Return 5 Year Return
Tata Large Cap Fund – Direct (G) 67.10% 12.20% 13.90%
UTI Flexi Cap Fund -Direct (G) 77.40% 17.10% 17.60%
Mirae Emerging Bluechip Fund -Direct (G) 84.60% 20.10% 22.50%
Tata Mid Cap Growth -Direct (G) 80.60% 16.10% 17.30%
JM Tax Gain Fund – Direct (G) 76.30% 13.50% 18.00%

(Source: Mutual Funds India: Mutual Fund Investment, Mutual Fund Calculator, Types of Mutual Funds, Top/Best Performing Mutual Funds in India – Moneycontrol)


ii) Direct Equity

Equity as an asset class over the long run is considered to provide the highest return. Considering the potential for high return, your early investment portfolio should have some corpus into direct equity for wealth creation in future.

You can take a quick online free course of Koppr on stock market basics to learn how to invest in stock markets for beginners.


iii) ULIP

Unit linked investment plans are the hybrid investment options that provide insurance benefits as well as investment elements.

Part of your premium is invested in the various market-linked funds in a proportion chosen by you. ULIPs come with a host of other benefits and are tailored to your specific needs.

ULIPs are one of the best tax-efficient investment plans that have a higher potential for wealth creation.


iv) Public Provident Fund

To add stability to your long-term investment portfolio, you can consider investing in a Public Provident Fund. PPF is government-backed and comes with a lock-in period of 15 years.

You can start with a minimum investment of INR 500 to a maximum of INR 1.5 lakhs. PPF is a tax-efficient long-term investment option that offers a fixed rate of interest (currently 7.1% p.a.).

Apart from these investment options, there are plenty such as retirement/pension plans, conventional saving schemes offered by insurance companies, gold ETFs and many more.

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Choosing the right mix of investments is as important as investing. As you invest in your 20s, you have the advantage of time and the power of compounding.

With the increasing income and change in life phases, it is important to refine your investment strategies more often as you need to keep reviewing your goals and changing needs.

As you progress, you can take help from experts such as Robo advisors. Boosting your financial literacy with time is a must. You can take an effective and quick online course of Koppr on early financial planning to start it right!

Start early and invest wisely!

What every Indian in their 20s should know about their money?

What every Indian in their 20s should know about their money?

It is an overwhelming experience when a fresher like you, just out of college receives the taste of financial freedom with your first pay packet. It is way more than the stipend or pocket money you were getting till a few days ago.

The feel is like you have the whole world in your hands and you no longer have to ask for pocket money from your parents or elders at home! In fact, your heart wants to spend the money – your own money in buying gifts and goodies for your home and loved ones with pride.

And yes, now the latest fashion in clothes, accessories, and gizmos seem to be must-haves and most of you would love to splurge on them and more.

This is but natural a tendency with all youngsters and is well deserved too.

I am sure you will also agree that while having a great time splurging money wherever and whenever you feel like is a great feeling of freedom and happiness, there are likely to be financial commitments that you would need to and should make at the same time.

This is because in a few years, by the time you are 30 years old, your life and life stages are likely to have changed. This would come with undeniable financial responsibilities of parent(s) and/or wife and child or both.

Suddenly you may feel financially burdened and stressed thinking about how you are expected to meet the expectation for all. Trust me this is a common problem with most youngsters – who feel that you have a ‘lot of time’ and things to do before you can think of saving or investing in your 20s.

Looking at responsibilities through the ‘rear mirror’ of your car is an unwise thing to do. They are actually closer than you think.

So what should I do?

Investment for beginners is a thing to learn and how to manage your money in your 20s is a skill to acquire, if you want to grow wealth in the long run, live a financially healthy life and fulfil all your dreams.

We have a specialized course on financial planning, (PS This is not just like any other course!)

This article will give you an overview and tips on –

  • how to manage money in your 20s
  • where to invest for beginners
  • investing in your 20s
  • making money in your 20s


When should I start to save/ invest my money?

So what is the magic mantra for investment for beginners? It is quite simple you see.

Just Start early. Stay invested. Get better returns. No rocket science at all.

Yes, you must start early, even perhaps start from your first pay-check itself. You can start with small investment amounts of even Rs 500 a month/ year (depending on the nature of the investment tool you are considering) and later on increase the amount as your pay packet gets fatter.

This is because when you start investing in your 20s, even with very small amounts, it will still leave you with a much wider investment horizon. The longer the period for which you remain invested in a plan/ investment tool, the better will be your chance to diversify your investment between risk and income/ debt instruments to maximise wealth creation in the long run.

For example, when you are in your early 20s, your retirement is aeons away. However, if you start putting aside money in a reliable instrument, it will accrue a fortune for your golden years which otherwise will get stunted even if you delay it for say, 5 years.

One thing you much get clear at the onset. Saving money in a bank is not the same as investing money.

Saving money is more like hoarding money at a minimal interest rate like in a savings account that will not beat inflation. On the other hand exposure to equity and equity-related investments are capable of beating inflation and thus support wealth creation in the long run.

For example, say you are saving Rs 100 in a bank for an average interest rate of 2.75% to 3.5% in the bank savings account but retail inflation stands at 5.52% today. This means what you can buy at Rs 100 today, will cost you Rs. 105 tomorrow. But your bank will give you only Rs 103 approximately. Hence your money will be losing in its value lying only in the bank.

On the other hand, an investment in equity over a time horizon of 10 years and more is likely to get you about 10% compounded annually (and more) and thus beating inflation, leading to wealth creation.
Here are top 5 reasons why you should start investing in your 20s

What are your basic needs?

If you are wondering how to manage money in your 20s; you must first make a checklist of your basic yet mandatory monthly expenditures. This is because a chunk of your money will go into that whether you like it or not.

They can include an EMI for your education loan that you need to set off.  If your city of work is away from your hometown, then you will have rent, conveyance, utilities, groceries, medicines and insurance at least, to account for.

This is likely to eat into approx. 50% of your salary. Let us take a closer look into these items and how you can optimise your expenses.

1) Education loan

Loans on your shoulders are never a good thing to have. So along with the EMIs, whenever you make an extra income as an incentive or bonus, you must use it to set off your loan to clear it off at the earliest.

Same for your credit card loans. Always try and pay off the credit card dues in full to avoid getting into the vicious cycle of interest accrued on the outstanding amount.

That will increase your disposable income to a large extent to consider discretionary expenses of your choice.


2) Rent

The largest chunk of your salary at hand is likely to go into rent and all associated utilities, monthly groceries, and medicines.

If you see that your hands are getting tight because of high rent, you may look at moving to a different locality where rent will be relatively less.

You can also look at sharing an apartment with someone else if you do not have frequent visitors from home. That will help to lessen the financial burden on you.


3) Health Insurance

Whether you are single or married, the investment for beginners must commence with a health insurance coverage of at least Rs. 5 lakhs if you are in a Tier I city. In case your parents are not covered as of date, then consider a family floater with the same amount of coverage to start with.
If you are married with children, then the family floater should be Rs. 10 lakhs.

Later on when your income increase further, you must look at adding top-ups for critical illnesses and hereditary illnesses if any to ensure maximum protection to yourself and your family in the face of any unforeseen medical exigencies.

I am sure you are aware of holes in people’s pockets that the rising costs of medical expenses create if these expenses are not planned well.

If you are looking to buy unbiased and best health insurance plans, feel free to reach out to us!

4) Term life insurance

It is prudent to buy a term life insurance cover of at least 22 times your annual salary (as estimated and approved in the regulatory guidelines of IRDA).

This will ensure your financial liabilities (if any) will be taken care of at a minimal cost in case life poses any uncertainty in the form of death, disease or disability. Any financial burden on the family will be prevented.

Yes, if you are 25 years old and want to buy Rs. 50 lakhs term insurance cover, it will cost you anything between approx. Rs. 5000 and Rs. 6000 a year (source policybazaar.com online applications).

This comes to just about Rs. 16 a day which is perhaps a throw-away price for buying  ‘peace of mind’! Isn’t that a great bargain for what’s at stake?


Where to invest for beginners?

Of the remaining 50% of the salary, you should aim at investing at least 30%. Remember all your investments should be well thought of and be based on various financial goals of your life. You are likely to have short term, medium-term and long term goals.
However if you do not have an education loan to repay and/ or are based out of your hometown for work, then you must aim to invest about 50% of our salary at hand. This will ensure your money is working for you to make you wealthy!

1) Long term goals:

These goals have an investment horizon of 10 years and above. They may include planning for retirement, children’s education, investment in real estate, a family vacation in a foreign country, wealth creation, etc.
The best investment for beginners in India is SIPs (Systematic Investment Plan) in equity and equity-based schemes. When you invest in these kinds of SIPs with a long term horizon of over 10 to 15 years and beyond, then you safely earn a return of over 10% compounded annually. It has been observed that a monthly SIP of Rs 3000 over 35 years can earn you a whopping 12% return and build a capital of Rs. 1.9 crores.

With the increase in your paycheques, you must look at increasing your contribution in SIPs. Not just equity and equity-related schemes; SIPs are available in debt-related and a combination of debt and equity schemes as well.

SIPs in Equity Linked Savings Schemes (ELSS) have a dual advantage of returns and tax benefits U/S 80C on your investments in the scheme as well. All ELSS have a lock-in period of 3 years for the tax benefits it offers.

So depending upon your goal and risk appetite you should be able to consciously choose schemes to help in making money in your 20s.
However, largely popular investment for beginners in India for long term investments have been Employee Provident Fund (EPF) and Public Provident Fund (PPF) schemes.

These two schemes will reap you the best interest rates among all known small savings schemes in the country. While EPF is a set of mandatory monthly deductions and contributions made by your employer from your salary, PPF is a voluntary account opened by individuals with various State Bank branches of India.

The best part about investments in PPF is that –


  • You can open and maintain the account with just Rs. 500 a year.
  • With the increase in your income, you can increase your contributions year on year.
  • The maximum you can contribute to your PPF account is RS. 150000 per year.
  • The lock-in period on the PPF scheme is 7 years; partial withdrawals are allowed post that.
  • All withdrawals from your PPF account are tax-free.
  • Your annual contribution into your PPF account is eligible for tax relief U/S 80C too.


2) Short / Medium-term goals:

To meet your short term and medium-term goals, there are an array of debt instruments like fixed deposits, bonds, debt/ income fund, liquid funds, etc. where you can invest your money.

In case you are a person who wants to play it safe and would want to secure a steady flow of money for yourself, you may want to invest your money in a debt instrument that would generate a monthly income for you for the chosen term.

Then Post Office Monthly Income Scheme (POMIS) is the right instrument for you.

You can invest a total of Rs. 4.5 lakhs in your POMIS account that will yield you a guaranteed interest of 6.6%.  Later on in life, you may invest another Rs. 4.5 lakhs in your wife’s name as well if you want.

The best part of this investment option is that there is no tax deducted at source on the monthly disbursements!


3) Build an Emergency Fund:

We, the lucky survivors of the Covid-19 pandemic can vouch about the fact that life is very uncertain. So is work. There is no guarantee in anything.

Thus siphoning of money into a new/ separate account to build an emergency fund would make a wise choice for all youngsters like you to seamlessly tide over the times of financial crisis that may arise in future.

To achieve this goal, you can choose from various tools like fixed deposits, recurring deposits, or even a separate savings account.

Learn all about Mutual Funds for FREE and get know know why it one of the best investment options

Any money left to spend for fun and on free will?

Yes of course! You have managed your money so well that you still have 20% of your at hand salary to spend it the way you want to! You can spend this money on buying clothes, accessories, gadgets, eating out, gifts for your loved ones, weekend trips to nearby destinations, donations, etc. Isn’t that wonderful?

Just keep in mind that these discretionary expenses should not ideally overshoot 20% of your salary at hand. In case it does, try and trim it mindfully with a smile without hurting your own emotions or others.
However, if you do not have any loan on yourself and your workplace is in your hometown itself, then surely you may at times take the liberty to spend even 25% of your monthly at hand salary. And trust me it is okay to do that.

Shopping and spending time with friends after all are great stress busters!


Avoid these money mistakes if your objective is making money in your 20s

While there are many mistakes in life that are forgiven and forgotten too, mistakes around money matters are hard to cope with and recover from. This is because it is your hard-earned money.

Thus you need to be careful not to fall into matters of money in your days of young adulthood as you might take a lot of time to bounce back but the scar will remain.

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Here are the 5 common money mistakes to avoid in your 20s.

1) Monthly expenses not budgeted:

Managing your money first time all by yourself in your 20s will be exciting but can prove to be a challenging affair as well. If your calculation goes wrong, remember you won’t have pocket money to fall back on.

Thus the 50:30:20 rule discussed here can be handy. It is wise to start with a detailed list of mandatory expenditures for the month to allocate/ reallocate money as required.

2) Rising Debts:

While it may look great to flash a bunch of credit cards in your wallet when you are young, it is strongly advised to keep just one credit card for your use as required.

That is because it is simply impossible to remember all transactions made on different credit cards and keep a track of multiple payment cycles.

Thus people, mostly youngsters like you fall into a trap of revolving credit with very high interest rates that can be as high as 40%. Keeping debts on loans and credit cards has never done well for anyone.

It will 

  • not only get you into a vicious cycle of revolving credit,
  • eat into your disposable income paying EMIs with high-interest rates,
  • also adversely affect your credit score which will require you to run from pillar to post to set it right when you need it
  • Take away your night’s sleep and make you stressed.


Thus make it a habit to settle your credit card bill in full, on or before the due date. A monthly reminder on your smartphone will help do the needful for you.

For other EMIs on loans, SIPs, etc. and monthly payment of phone bills among others, auto-debit mandates with your bank will save you from all late payments with extra charges.


Here is our comprehensive guide on Debt Management – How to Manage Your Debts Effectively


3) Saying ‘No’ to more income opportunities:

You are young and vibrant filled with energy and passion in your 20s.

That ensures making money in your 20s more viable with so many opportunities around. Other than your regular 9 to 5 job, you can make that extra money by investing prudently inequity and dividend-yielding schemes, as a freelancer in your specialised area(s), helping start-ups, giving tuitions, among other things.

These will not only keep you fruitfully engaged but boost your confidence and add to your disposable income as well. So don’t be complacent, go for more!


4) Shutting out personal needs/ wants:

Never play Uncle Scrooge on yourself and try to save every paisa. That will not help.

That is not the reason or objective of planning and making investments. When you see your friends and peers enjoying their life, it will only lead you to depression, stress and make you unhappy.

Remember it is good to spend money and treat yourself and your loved ones once in a while. It builds your morale, keeps you happy and motivated too. However, if you need to splurge on something really expensive compared to your pocket –

Stop. Step back and Think whether you REALLY need it NOW or it can wait for a LATER DATE. That will save you from regrets later on.


5) Do not be the soft target:

Are you the kind who can’t say no to friends when they ask you to settle bills during getting together? All the time? Every time? Beware of leeches/ parasites.

This is a very common feature in young people in their 20s. It is a great virtue to be warm, generous and kind-hearted, but it is also important to understand if you are being taken advantage of by your own people in your social circle.

Over a period of time, it is bound to make you feel bad instead of improving your mood. If that is the case, though it is a hard choice to make, you must look at making changes with whom you hang around.

This is the right thing to do in the absence of fairness and compassion within the group. There is no place of guilt in this action of yours as it is not good to feel financially lost because of some unworthy people. 

Though this article detailed options of investment for beginners and how to manage money in your 20s, it is your willingness and foresightedness that will ensure how efficiently and effectively you manage your money to ensure that you live and gift your loved ones financially happy, healthy and stress-free life.

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