When it comes to finances, Indians are renowned for their shrewd reasoning, yet there is a severe lack of information and investing appetite when it comes to comprehending investments and financial diversification. The inadequate focus was placed on educating students about these potentially significant life subjects in schools or universities, which is why young professionals find it difficult to pay their taxes, comprehend the equity markets or engage in trading and investment.
As millennials, we have always been told that investing in equities is the riskiest and that doing so will result in financial loss.
Less than 10% of Indian families participate in alternative assets like mutual funds or equities, the bulk of which choose to preserve their money in bank accounts. When it comes to stock trading and investing, gold, post office savings, and real estate are favored
According to a poll by AMFI, 72% of the public have no idea how much money they should invest to become financially independent. A further 56% of them lack financial management skills, and roughly 76% think that financial planning education is urgently needed.
Saving money in bank accounts is perfectly OK, but there is a real possibility that over time the value will decrease owing to inflation. This highlights the necessity for early instruction in stock trading and investing, educating kids about the ideas of compounding, the stock market, portfolio diversification, and much more that may make them more financially literate as adults.
Therefore, why should parents and educational institutions teach their young children about trading and investing? Because they are youthful, active, and have time on their side, college students have an advantage over traditional people who often start investing in their 30s. Compound interest can help them achieve more financial success.
The basic sum is $100. It has the potential to earn 10% a year in returns when invested in Fortune 500 businesses. $110 will be the total sum for the first year, $121 for the following year, and $133 for the following year.
For college students, the power of compounding really shines since it gives their money more time to grow.
Early investment also enables them to take measured risks without worrying about how they would damage their families and livelihoods. In reality, it provides insight into stock evaluation and investment dangers, enabling customers to evaluate current share prices and watch their rise and fall in order to make wise decisions.
The distinction between saving and investing is as follows: students need to realize that while saving is a prudent course of action, investing in little amounts enables the money to grow on its own.
Why is diversification in financial portfolios is important? : Keeping your investments diverse is the key to successful investing. If done properly, introducing trading and investing may have a beneficial impact on the amount of money it can generate with the least amount of danger.
Explain fundamental ideas: Investments, as previously noted, provide a broad financial portfolio. Teaching students the fundamentals of ideas like stocks, the NSE, BSE, mutual funds, equity, and others is crucial. They will have more alternatives and choices if you can help them grasp the many variants.
Strengthening their stock analysis abilities: It has already been noted that analysis and intuition are combined in the stock market. For them to begin trading, it's crucial to teach college students the fundamentals of share prices, their peaks and troughs, and how they affect their investments.
Leverage Gamification: Another intriguing strategy for attracting young people's attention to trading and investing is gamification. By allowing individuals to practice buying and selling stocks without taking any risks or being exposed to the markets, the simulated version of real-time stock trading enables people to get over their fear of losing money.
Starting young makes it feasible to alter the way that the younger generation views money, giving them a chance to become debt-free and more financially independent with the ability to enhance the Indian economic climate.