On an average young Indians start their formal earning life between 21 and 25 years of their age mostly after completing their graduation and/or post-graduation studies. While many choose jobs that pay them monthly salaries, a few ventureful individuals choose the entrepreneurial route to earn their livelihoods.
What does a young 25 year old do with his own-hard-earned-money? Of course, spend, save and invest, with emphasis on spending.It would be that stage of their lives when they would like to splurge or spend excessively on many items that money can buy. Gadgets, vacations, eating out, parties, car, bike etc. are on the top of their agendas. Saving and investing would usually be their least of the priorities.
With the change in the dynamics of the world there are very few families that are dependent on their children income to sustain. The affluency levels of middle-class / upper middle-class families have increased over the last one decade wherein the children who start earning need not have to bother about financially taking care of their parents. This new trend has led youngsters to spend more than their parents used to spend when they were young.
But are these young earning population aware of the hardship that they might face in the future when they get older? By the time the current 25 year old become 50 year old (the year would be 2040) he could be already staring at retirement because going by the researches done the new retirement age could be 50 and not 60 in the not-so-distant-future. So how does today’s youngster face his retirement days?
At 4% annual inflation the monthly mandatory expenses bill by 2040 could be Rs.40000 per month if the same is Rs.15000 today. So the prudence would be to be equipped with such options to earn such kind of income when one is not actively working. One of the investing options for youngsters would be to invest in real estate today by not delaying or procrastinating the decision to do so.
Over the last one decade in and around Mysore city the prices of real estate has grown at a healthy pace of 12% to 15% annually making it one of the hottest investment destinations. As an example, if at the age of 25 to 30 years if one invests in a property such as a vacant site of 1200 sq.ft. at a cost of Rs.10 lakhs, in 25 years at 15% compounded rate the value could become Rs.3.30 crore which is terrific by all accounting standards. For a period of 20 years the same investment could become Rs.1.70 crore and for a period of 15 years the valuation could be Rs.81 lakhs.
Delaying to invest would lead to lesser realization of returns because the time of retirement would remain unchanged, but the funds required would remain to be the same. Apart from being one of the safer assets it can also offer handsome capital appreciation and also steady rental income if a house is built. So, it is highly recommended for youngsters to start investing when young and reap the benefit of long term.