<\/span><\/h2>\n\n\n\n<\/p>\n\n\n\n
It\u2019s right,<\/p>\n\n\n\n
Investing early in life aids in saving more than compared to those who start investing in the later stages of their life. Many people think investments need big amounts, which is why they postpone them and miss out on the opportunity to create huge wealth. Even small amounts can do miracles. Creating wealth is not an overwhelming task. It just needs patience, consistency, and a little sacrifice of your present luxury.<\/p>\n\n\n\n
Let\u2019s look at an example of Mitali and Amrit, who are two friends who embarked on their working life journey at the age of 20. Both earn Rs. 20,000 every month. Mitali and Amrit both have different perspectives on their life. Mitali believes in investing her money to fulfil her future goals, long term wealth creation as she is well informed about the advantages of early investing. So, Mitali starts her investment journey right away as soon as she receives her first salary with LXME Long Term Plan for Rs. 5,000 per month at the rate of 14% till her retirement, i.e. till age 60.<\/p>\n\n\n\n
On the other hand, Amrit believes in enjoying her life to the fullest and spending on different luxuries. She thinks her whole life is ahead of investing and doesn\u2019t focus on increasing her wealth, or the importance of money management so she ends up spending all her salary until she realizes the importance of investing. She asks Mitali for a good fund to invest in her money and reap the benefit she is receiving. Radha suggests LXME\u2019s Long term Plan and starts investing in the same from age 25 with Rs. 5,000 at the rate of 14% till her retirement, i.e. till age 60. So, let\u2019s look at what corpus Mitali and Amrit have accumulated at the age of 60.<\/p>\n\n\n\nEvidently, we can see the power of compounding in the longer term. Mitali was able to accumulate \u20b9 5.69 crores (\u20b9 11.30 crore \u2013 \u20b9 5.62 crores) more than Amrit, as Mitali just started 5 years earlier. To match the corpus of Mitali, Aarti will have to invest Rs. 10,066 at the rate of 14%.<\/p>\n\n\n\n
If you invest early, even small amounts of investments with consistency can make you millionaires. You can see the power of compounding in the long term. Your consistent investment of \u20b9 5000 can make you crorepati. The power of compounding works by growing your wealth exponentially. It adds the profit earned back to the principal amount and then reinvests the entire sum to accelerate the profit-earning process. This is how you can create wealth with small amounts.<\/p>\n\n\n\n
Pro tip: To create wealth, start investing NOW; as you have seen, even small amounts can help you do that. Visit the LXME app<\/u><\/a>, where you can look for various portfolios that are curated and well-researched by experts.<\/p>\n\n\n\n <\/p>\n\n\n\n
<\/span>3. You can earn quick money through trading in the stock market.<\/span><\/h2>\n\n\n\n<\/p>\n\n\n\n
It\u2019s a lie,<\/p>\n\n\n\n
Earning quick money is a myth. You might have heard that you can earn quick money through trading in the stock market. That\u2019s true, but it needs expertise, which comes after spending time learning and understanding the stock market in detail. However, you need adequate knowledge and analytical skills, after which you can trade in the stock market. So, time needs to be spent on learning; that\u2019s why we say earning quick money is a myth. The trader does not always earn profits. They also incur losses, which is why you should have a high-risk appetite. The fact about trading is 90% of traders lose money in Intraday Trading.<\/p>\n\n\n\n
<\/span>What is trading?<\/span><\/h3>\n\n\n\nA trader having expertise, knowledge, time to track the market, and a high-risk appetite resorts to trading. They use volatility to try and make profits.<\/p>\n\n\n\n
<\/span>What is investing?<\/span><\/h3>\n\n\n\nAn investor who wants to grow their money and create wealth over time by using fundamentals of the market, sector, and stock. This is a long-term strategy that aims to mitigate market volatility.<\/p>\n\n\n\n
If you want to create wealth, you should invest and create a diversified portfolio in order to earn inflation-beating returns and have stability in your portfolio.<\/p>\n\n\n\n
If you wish to invest in the stock market but do not possess adequate knowledge, then you should consider investing in mutual funds as they offer various diversified portfolios according to your needs, and these portfolios are professionally managed by fund managers.<\/p>\n\n\n\n
You can visit the LXME app\u00a0and look out for portfolios such as LXME Long-Term Plan, LXME Short-Term Plan, LXME Tax Savings Plan, LXME Rs.100 Equity Fund, etc., which are finely curated and well-researched by experts.<\/p>\n\n\n\n
<\/span>FAQs: Money Management Guide<\/span><\/h2>\n\n\n\n
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<\/span>What is money management?<\/span><\/h3>\n\n\n
Money management refers to the process of managing and controlling your finances effectively. It involves budgeting, saving, investing, and spending your money wisely to achieve financial goals and secure your financial future.<\/p>\n\n<\/div>\n<\/div>\n
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<\/span>Why is money management important?<\/span><\/h3>\n\n\n
Money management is crucial because it allows you to:
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<\/span>What are the benefits of money management?<\/span><\/h3>\n\n\n
Effective money management offers numerous benefits, including: