“You think “I should have started investing early…. What’s your kid’s age?”
“You think “I should have started investing early…. What’s your kid’s age?”

“You think “I should have started investing early…. What’s your kid’s age?”

“I made my first investment at age 11, I was wasting my life until then” – Warren buffet – when he was asked when should an individual start his investment journey…

The Power of compounding is nothing but pure “Magic” – when you give more and more time to your investments the better the magic works…let’s see an example of this MAGIC –

Well, the above are proper numbers and not Magic !! we all can achieve or fail depending on when we start and how long we keep it going…

In the above chart what do you think will happen to the final amount if someone starts at age 20 or age 10!!  This is what greats like Warren buffet did. Yes, he had a good investment IQ, but someone who starts as early as him will indeed become prudent with time and master the art of making money from money, of course the compounding from many years will create its Magic!!

The Unthinkable can be achieved over a 30, 40 or 50 + year period of systematic investment.  Who knows your kid can be the Warren buffet of India !! and credit would go to YOU…!!

So, let’s talk about how we can make this happen.  The younger your kid right now the better…

Like all good things you want to do, but face a resistance – you need to make systematic investment a HABIT…and a habit which you and your kid should be proud of even during the investment stage.:J

Like all investment decisions you first need to draw up an Asset allocation plan.  Here, this investment is a very long-term horizon plan – thus we need to have maximum of our savings into equity and related instruments, which are risky but can yield much higher returns. 

Perhaps you can start with Systematic investment plan (SIP) of mutual funds and later add Stocks (direct equity) going forward.  With time and learning you and your kid can explore adding other asset classes (directly or indirectly) like precious metals, real estate, bonds, etc. to the portfolio.  Taking expert advice on this is also a good option.

Goes without saying that making your kids portfolio will require learning, exploring different options and mainly continuing during the thick and thin of life and markets. Don’t wait for a day when you will learn more and start …start right away and gift the habit of investing to your child, this will be one of the best things your can do them…

Author: Mr Nirmal M Jain | Mr Nirmal M Jain is a Co-Founder at HappyWise Financial Services. He has helped over 100 Families over the last 15 years of his services in the Financial Planning Sector. He has been a mentor to several people to help them better understand investments, stocks, mutual funds, financial planning, personal finance and above all his favourite term “The Power Of Compounding!”.

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