Money Making Tips, Investment Options For People Under 20: All You Need To Know

Unsure about where and how to invest your money? Starting young can set you up for serious gains. Here’s a quick guide to the best investment options for those under 20.

Exchange-Traded Funds (ETFs)

You are interested in a wide variety of assets, but you do not have the funds for them, right? ETFs are the best option for you as you get wide access to a collection of assets like stocks, bonds, or commodities, giving you the ability to diversify and access a wide variety at a lower cost.

You can open a DEMAT account through platforms like Zerodha, Groww, or Upstox under a guardian’s name, and it is advisable to trade in ETFs like Nifty 50 ETF or S&P 500 ETF.

A downside to ETFs is the market risk and tracking error that come along with it.

Mutual Funds (SIP)

As a young individual, you have limited funds, and you have to make the most out of them. In that case, you should go for Mutual Funds. Why? It pools funds from multiple investors in a diversified portfolio of stock, bonds, and other securities, which allows you to make small yet regular investments, making it perfect for your situation. It helps you get disciplined while investing and helps to accrue benefits in the long term.

You can get started by opening a minor account through a guardian on Groww. It is advisable to start with low-risk index or hybrid funds.

The downside to this is the high management fee, which might erode your returns.

Government Bonds or T-Bills

These are the safest havens for your investment as their returns depend on the country’s government stability which you are investing. 

You can start by applying through RBI Retail Direct or NSDL under a guardian’s name.

The downside, despite the safety and stability of such investments, is the low returns offered, which are comparatively lower in comparison to equities. 

Recurring Deposits (RDs) or Fixed Deposits (FDs)

Now, you might be interested in just getting a stable, regular, and reliable way of earning income. In that case, investing in FDs or RDs in banks is the basic way to go forward.  It helps you earn fixed income over a fixed period, and a great way to build your savings.

To get started, open a minor RD/FD account with a guardian at any bank.

A downside to these is lower returns, and your money is locked in for the period mentioned.

Starting a Side Business or Freelance Work

One asset you tend to neglect is the skills you hone. Offering services or products with your skills is one of the best ways to go forward. It helps to further develop your skills, build business acumen, and helps you gain hands-on experience. 

You tend to earn more with limited risk and volatility.  You can start off freelancing in areas of content writing, graphic design, or dropshipping with platforms like Fiverr, Upwork, and Shopify providing you with access to these. You can use the income generated from these jobs to invest in the above-mentioned funds.

This requires a lot of time, commitment, and effort. 

In all, the general essence is to seek safer and stable investments with limited risks when you are a beginner. It is all about baby steps. 

Disclaimer

The views expressed in this article are purely informational, and Republic Media Network does not vouch for, promote, or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks and readers are advised to seek expert advice before investing in stocks, derivatives, and Mutual Funds.

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