International Students’ Day 2021 — Investing Lessons To Learn From Students
For International Students’ Day 2021, we took stock of how well youngsters — students (aged 18–22) — are placed when it comes to understanding finances and investments. We interviewed students studying Bachelor and Masters in Finance, and compiled the best responses below.
But what value would you get by reading youngsters’ take on finance? Well, one word — perception. Some of you may already be parenting and some may be on the way. If you don’t fall in both these categories, you still have something to take away from this article — students can be great teachers, all you need to do is have an open mind.
With this premise, let’s see how young minds, who form the majority of India’s population, perceive finance and investing.
1. Have you started investing? If not, when will you start investing and why do you think it is important?
Yashika answers, “As soon as I start earning. I need to invest so that I can accumulate sizeable money in hand.” Dipti Bhosale has an interesting take, “I am looking forward to investing in 2–3 yrs. I feel it’s better that you make your money work for you instead of yourself working for it.” Now isn’t she on the right track? Just a few years ago, it would be a rare sight to see a student thinking about making money work for them.
Pleasantly, there are a few students like Abhi Malik, Dipun Behera, and Pranav Patil who have already started investing. They say it gives them financial confidence to keep investing for their future. For one, they want to earn while they sleep so that their investments can zoom enough to beat inflation, thanks to the power of compounding.
Ayush Gautam looks to have gotten the idea of beating inflation and also the difference between saving and investing quite right. He says, “If we see the rate of inflation, we can observe that after depositing money in a savings bank account, we are actually losing its original value! And, if we start investing instead of just saving, we are not only saving the original value of the money but also growing it, or we can say money is working for us at that time.” Now that is a solid lesson we can all learn, regardless of our age.
Varun Sachan says, “Investing is very important because we live in the 21st century where everyone is on the run for the money. Investing is the only thing that can give you high returns and help raise the standard of living.” We were also pleasantly surprised with Piyush’s response who said he wants to invest not only to be financially independent but also to create a second source of income. Students also understand that staying long in the market means higher returns and a larger corpus for retirement.
But some responded that they would start investing after turning 25 and yet others said they would start only after being financially independent. In such cases, parents and guardians should actively step in and make sure that their children understand that the act of investing can propel financial independence.
A witty answer that we got was from Ananthakrishnan KV is, “It is important to invest in ideas and powerful corporates despite the risk. Par risk hai toh ishq hai”. Further, Aryan Agnihotri strives to be financially independent even as a college student. He has already taken his first step towards achieving it by investing his pocket money.
2. How much would you invest from your first salary?
Another pleasant learning was that students are aware of the presence of various asset classes. They look to live frugally, invest 10% to 30% of their salary and think long-term. A fresh perspective we got to see is that a few respondents including Karan Thakur and Suman D said that they wouldn’t mind investing 70% to 75% of their salary while still young as they would have lesser responsibilities.
Neelesh Pandey thinks a step ahead. He says, “I would invest as much as I can, live frugally and invest the difference too!”. Says Pranav Patil, “I will invest 30% for long term and use 20% for day trading. With the rest of my remaining salary, I will buy health insurance and meet other daily expenses such as food.” This is a welcome response too as many want to board the gravy train to make quick gains.
Continue reading the responses to the rest of the questions—where would you invest your first salary, how would you mitigate risk in your investments, and what could your parents have done differently when investing.