How to start investing as a teenager in India to be Successful

“The best time to plant a tree was 20 years ago, the second-best time is now”

Warren Buffett 

If you are reading this post I assume you are a teenager and want to learn about investing, personal finance, stocks, real estate etc…

Now if you have developed your interest in personal finance at this age, you have got a huge head start and chances are you will have a good financial future.

Investing is as crucial as learning your first language. Teenagers who are dedicated to their financial future should learn how to manage their money smartly.

How do I start investing as a Teenager?

Before investing your money, you will need to learn about investing, but do you know how to Start Investing?

If you are reading this post I assume you are a teenager and want to learn about investing, personal finance, stocks, real estate ( want to know more about real estate ) read How to do Real Estate Investment in India ? 

You can refer to many books such as The Intelligent Investor, Rich Dad Poor Dad, Think and grow rich and one of my favorite ‘Principles by Ray Dalio’. These books will provide you with great insights into the minds of legendary investors and how did they make it. 

There are lots of online resources available in this day and age, you can refer to websites such as Investopedia.com, Yahoo Finance, Zerodha Varsity ( for fundamental analysis ) There are many YouTubers like Graham Stephen, Meet Kevin, The rich dad poor dad show, who make videos on investing and personal finance, I will strongly advise seeing their videos in detail.

Now see you are a teenager, so you will not be able to invest your money on the go, you will need help from your parents or guardians. 

Ask them to open you a custodial brokerage account, so that you can apply those skills in that account and can see how it goes. You can open a brokerage account using many discount brokerages like Zerodha, Upstox, 5Paisa etc. Opening a brokerage account is a lot easier nowadays thanks to technology. These discount brokerages have their websites and applications where you can easily follow a few steps and now you have a brokerage account horrey!!.

How to manage money?

First, find a high savings yield bank account, you will need this because when you are not using your cash then also it is growing.

Get in the habit of budgeting, now this is a skill, majority of people don’t learn in their lifetime. ‘Carefully monitor where your money is going.’

Try to establish a 3-6 months emergency fund ( I know you are a teenager why would you need an emergency fund, it is just a good practice for your future financial goals )

With help of your parents or guardians try to set up a retirement tax-free account and save for that.

If you can maintain a regular progress report, this habit will help you in the long run.

Where should I invest my money as a Teenager?

Now you will be overwhelmed by how many investment options there are when you have a brokerage account, like direct equity, mutual funds, debt mutual funds, gold ETFs, etc…

• Direct equity or Stonks is the most rewarding but it has the most risk, it is very difficult to pick a stock at the right price at the right time ( if you can do that please teach me ), the only advantage of investing in direct equity is that in long periods it has given great returns and by great returns I mean 12-14%.

To invest in the equity market you will need to dedicate a good amount of time to it, you will have to research stocks and still, you will run a risk of losing it all.

• Mutual funds are a large pool of money that is invested by a fund manager, and generally, mutual funds are well diversified and contain comparatively low risk ( but you have to still do your fair share of research about the mutual fund in which you want to invest ).

Note that if the mutual fund is actively traded then, the returns are largely dependent on the fund manager. My advice will be to invest in an index fund.

• Debt mutual funds invest in securities such as corporate bonds, government securities, treasury bills. 

This is a low-risk kind of investment and will give you steady returns, but remember this is a low risk not no risk, these kinds of funds come with interest rate risk and credit risk.

• Gold ETFs as the name suggests are funds that invest in gold, now see gold is one of the perfect investments that you can make, a shiny metal that is a great hedge for your portfolio.

How you invest your money will depend on you and your risk-taking abilities, ideally, you should have a portfolio that has all kinds of investment from stocks to real estate, you should always focus on diversification.

Conclusion

You have a very big advantage, that is time, and when it comes to investment, time has a compounding effect on your money, So start investing as soon as possible. I will suggest,  you utilize the advantage of your age and learn about these topics in-depth then only you will be able to harness the knowledge and make something out of it. 

So, how are you going to invest your money? Leave a comment Down below.