5 Best Ways To Invest In Your 20s And Get Wealthy In India

 Since the doors to the stock market have opened to the common man, he has always been very keen to throw at least a small chunk of his savings in it.

Later on, as transparency of the companies listed in the stock market increased, young teens too began to grab a piece of the action.

Understanding Stock Market isn't difficult. All it takes is genuine interest, determination, and finally the patience to scroll to the bottom of this page!

Best ways to invest in your 20s:

In this post, you will get to know how you can utilize your savings/funds to the maximum limit without getting trapped into Debt and what knowledge you must have to become an intelligent investor:

1. Avoid any loan

Avoid taking any loan from a bank. Taking a loan from a bank means you are reducing your potential to invest big. Loans are repaid with monthly installments or EMIs.

An education loan too isn't recommended. But if it is a necessity then it's ok to take one. The reason behind it is that normally in India education loans just have an interest rate of 3%-4%. 

Hence, these loans won't prove themselves a huge hurdle for your investment career.

Plus, you can even convince your parents easily to repay the education loan you have taken.

But, you should never take these loans if you want to do a healthy start for your investments:

1. Personal Loan

2. Car/Bike Loan

3. Any other unnecessary loans on commodities that aren't your need.

As a Fine Investor, your first goal is to Reduce and Eliminate all the loans that suck money out of you.

2. Insurance

Suitable insurance for your money will come in handy in case you lost all your investment due to some unforeseen circumstances.

The only two recommended insurance policies to buy in your twenties by professional investor Ankur Warikoo are:

1. Health Insurance

2. Life Insurance

While choosing insurance, choose a Term plan that simply has a larger cover compared to regular insurance that pays you back.

For more clarity, your insurance cover should be at least 20-25 times your annual salary during your twenties.

3. Start as early as possible

The main reason why you should start investing in your twenties or as soon as you get your first paycheque is the tax liabilities on you are nill.

This means you don't have to pay even a single rupee as tax for the government.

As per the latest figures, a person below the salary of ₹5 lac per annum is not liable to pay any tax to the government.

4. What is the right investment ratio?

Although it is completely dependent upon you to decide how much percentage of your salary must be used for investing, the ideal ratio is a minimum of 20% of your salary. 

For example, if you earn ₹20,000 in a month then the minimum amount you must invest is ₹4000.

In fact, it wouldn't be difficult for you to live comfortably if you are even investing more than 50% of your salary unless you have taken a loan from the bank or someone else.

An amazing fact to note here: During your twenties, nobody expects you to be rich or wealthy. It simply means you are not bound to your family's expectations to earn more money.

If you choose to spend all your valuable money in your twenties for the sake of enjoyment, you are putting your financial freedom for the next 50-70 years at a huge risk.

5. Know where to invest

Investing is a vast ocean of opportunities. At some places, you can only grab a handful. Whereas in some other place opportunities are at such a great extent you wouldn't know where to start from!

The first and foremost thing you should know is that Fixed Deposit (FD) isn't an option anymore. Most banks have a lower rate of interest compared to the inflation rate as of today in India.

FDs are the last thing you want to invest in your twenties.

But, when you're old, things are quite the opposite. FDs can prove to be a life savior in your old age which protects your money from stock market crashes and other possible incidents including scams.

What are the best places to invest your money? Here are some of them:

1. Stocks and Equity

2. Mutual Funds

3. Gold or other valuable resources

4. Cryptocurrencies

What is the ideal Investment Portfolio?

A professional investor Ankur Warikoo said if he was in his twenties then he would divide his investment portfolio in the following way:

1. 30% of the total money in direct stocks (Top companies)

2. 40% in portfolio stocks

3. 20% in gold bonds (Not Jewelry)

4. 10% in cryptocurrency