The first salary is such capital that everyone wants to invest in the right place so that the life ahead remains financially stable and also fetches a good return. Where to invest with your first income? Why is it important to invest the first salary in savings? What are the ways to invest and save money with your first salary?
Swati Raina discussed this with expert Harshvardhan Roongta, a Certified Financial Planner (CFP) from Roongta Securities, on the popular TV show 'Money Guru.'

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Why is it important to invest the first salary in savings?

The problem with the new income-generating population is that they think their income is relatively low or that this is their first job. So, if I take off 20% of that, how much money would I be saving? Better still, as soon as my pay increases, I will begin investing. People underestimate how quickly a modest sum may grow into a large sum if you start on time and with your first income.

Let's assume Ram and Shyam are two friends who were both hired to jobs at the age of 25. Ram began investing in Equity Mutual Funds as a SIP of Rs 1000 from his first income, with a 30-year goal of having some savings by the age of 55. And Shyam reasoned that saving 1000 would have a very small impact and if my pay increased, then after I would put in a SIP and begin investing after 5 years.

If we estimate roughly 14 percent of the profits they obtained annually at the end of the year on this equity SIP, by the age of 55, the same 1000 rupees that Ram had invested from the beginning becomes 54 lakhs, and Shyam's total becomes 26 lakhs because he started 5 years late.

This proves that the sooner you begin, the greater the potential of compounding, even if your first investment is tiny.

What percentage of the initial payment should be saved, and how much should be invested?

People should aim to make it a habit to save roughly 20% of their net in-hand income starting with their first salary. And the sooner you get started, the better. The remaining 80% should be spent on yourself, family, friends, or whatever you like because managing your costs with regular saves is also a vital skill of money management.

Where should I put my first salary?
Experts advise monthly pay workers to invest in Systematic Investment Plan (SIP) mutual funds as soon as they start earning money, most likely from their first salary. It is said to be the most intelligent way to save money.

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