What investment advice do you want to give to young investors? What are the must avoid mistakes?

What investment advice do you want to give to young investors? What are the must avoid mistakes?

I think the most important financial advice for youngsters is “Begin investing from your first earning.” This means that however small you are earning maybe, it could be a monetary gift on your birthday, it could be stipend after an internship, or it could be your first salary, always learn to save/invest first, then spend.
a) Power of compounding takes effect: Savvy investors understand the benefits of investing early and taking advantage of the potential gains from compound interest. By continuously reinvesting your earnings, you are exponentially increasing your return on investment.
b) You can take higher risk: Typically, when it comes to investing, avenues that are more volatile tend to give the highest return on investment. Investors, who have the time to recover if something were to go wrong, have the opportunity to make riskier moves.
c) Spending habits will improve: When you begin investing and see the power of compounding work, you automatically want to invest more. Which not only brings some discipline to your investing habit but also streamlines your spending habit. One tends to save more by cutting back on impulse buying and overcoming poor spending habits.
Having said, here are the mistakes you should avoid while investing:
a. Failing to plan: People tend to avoid enlisting their financial goals. Hence, they are unable to prioritize investing according to specific goals and end up unable to fulfil particular needs when the time comes. Investing is important, but it is more important to invest with a plan else thing tend to go haywire.
b. Piling on unnecessary loans: When loans are available as easily as they are today unless we keep a check on our expenditure, we tend to buy things we don’t need and adding to the debt pile. This tends to become a financial burden later and limit the money you are actually free to invest.
c. Overexposure on 1-2 asset classes: Another mistake that is very common is investing in similar kinds of instruments. That is not only an inefficient means of investing, but the inherent risk associated with such investing is also amplified. Diversification is the key to mitigating risk while at the same time maximizing returns.
d. Equating tax planning with wealth creation: In a bid to avail tax-saving benefits, people often get attracted to investments which do not offer good returns. We need to differentiate between the two and understand that they are two distinct goals. Both are necessary and need to be invested in separately.
e. Not investing at all: The general excuse is that there is not enough money left to invest. Not investing is worse than investing late. Investing is not just for the wealthy; it's for anyone who wants to work toward a better financial future. You can always start small and keep building on it in increments.
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