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India is a country where people focus more on investments. The main reason is that, unlike other countries, we don't have options where the government will take care of us completely. There are many countries where people don't worry about saving for the future and just spend what they earn on a day-to-day basis. That's because when they stop earning someday, they will still get some basic amenities like food, shelter, and medical needs from the government.
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This is not the case in countries like India. People here are mostly the ones that work hard and build an asset for their living and their family. People mostly live with a joint family system and the resources get transferred from the parents to their children and the children usually take care of the parents after their retirement. But that doesn't mean that the parents shouldn't worry about saving for retirement. Many people here think that they don't want to be dependable on their children for living after retirement. That's why starting to invest early is very important here.
Age gives some advantage
When it comes to investments, young age people have better opportunities compared to old age people. The main thing here is that young age people can take more risks compared to old people. It is a common saying that the more risk we take the returns will also be high. Those risks cannot be taken by the old people because if the money is lost, young people will have the age to earn the money back which is not an advantage for the old people.
I'm saying this to not discriminate the potential of young and old people here but mostly the mentality of old people is to have a safe income in hand. Young people look for more risks and opportunities and grab them. Young people might have the mentality to take risks and invest saying that even if they lose the money, they will be very confident that they can earn it back. That level of risk-taking mostly happens at a young age. As we grow up and get wiser, we look forward to having a safe and smooth investment.
Advantage of starting early
When we start early with investment, we get more years before retirement to do investments in diversified things. We also get the opportunity to check out things that are risky. A part of our income can even be spent on things that are experimental. We don't get that freedom when we get old. We will be a little composed when it comes to risk investments. Even if our investment is very small, when we start early, we get the opportunity to invest for a longer duration so that when we retire, we have a good lump sum in hand.
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Diversified investment is also something that can be achieved when we are young. We can keep our hands on many things that usually people hesitate as they get old. The main advantage I see is the risk we can take when we start early. Some of the investments like PPF when started early give a good return when we are close to retirement or even prior to that. If we start PPF later, we might have to wait 15 years to reap a profit from it. Additionally, people who start early also get a good premium when it comes to life-saving investment plans. As we get older, the premium is also high for certain plans.
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