The joy of your first job and first salary is something else. But understanding how and where to use that salary is crucial. Therefore, planning for your future from a young age, or even from your first salary, is crucial. For this, investing and understanding where and how to invest are crucial. Therefore, new thinking and new investment methods are essential. How to start your first investment journey while balancing your responsibilities? How to fulfill your dreams through investments? How to embark on a new investment journey? To answer these questions, we bring SBI Mutual Fund's Nivesh Cafe Series. In this, Money9 Editor Priyanka Sambhav spoke with young people receiving their first salary...

Where are young people spending their first salary?
In the initial conversation at the Nivesh Cafe Series, young people revealed where they are spending their first salary. While the salary of a first job may be low, the excitement of it doesn't diminish. Every young person wants to spend their money in their own way. Some spend it on shopping, some on traveling, and some on eating and drinking. It's fine if they have some leftover at the end of the month. Some young people also mentioned that their salaries are low, and even then, they give some money to their parents. However, saving and investing were completely absent from this conversation. The question now is how to start saving, or rather investing, with your first salary.

So, what is the rule for saving or investing?
There are many rules for saving. The internet is rife with such content. The most popular rule is 50:30:20. It's crucial to understand this rule. 50% of your salary should be spent on daily and monthly essential expenses, such as commuting to and from work and monthly groceries. 30% includes expenses that fulfill your hobbies, including traveling, shopping, watching movies, going to restaurants, etc. The remaining 20% ​​of your salary is crucial. It's crucial to protect it. In the Investment Cafe series, young people were told that saving money today will save them money tomorrow. Therefore, saving is crucial. It's difficult, but crucial.

RD or Mutual Fund?
In the conversation, one person said he wants to go on a foreign trip. For this, he invests 1,000 rupees every month in an RD account. The question is whether investing in an RD or an equity mutual fund will yield better returns. Currently, equity mutual funds may be a better investment option for young people; 5 years is a good time. And, if you look at equity-linked mutual funds over the long term, they offer a 12% return. Just as you're investing in an RD every month, you'll also invest 1,000 rupees every month in an equity-linked mutual fund. Keep investing, keep investing, keep investing for 5 years. So, imagine if you get a return of between 10 and 12%, you're getting a better return than an RD.

Will you lose money in a mutual fund?
When young people asked this question in Investment Kaise, they said that equity mutual funds are linked to the stock market. If the stock market rises, you'll make money; if it falls, there's a chance of losing money. In reality, when you choose a mutual fund, a fund manager manages your money. As the market fluctuates, the fund manager manages your money. That fund manager removes your money from risky assets and invests it in investments that offer better returns and have a negligible risk of losing money. This is after informing you. You don't have to do anything. Just do your part, invest ₹1,000 every month. You'll be investing in the equity market through a mutual fund vehicle. So, you could get better returns than an RD.

What is the power of compounding?
The Investment Cafe also explained the power of compounding to young people. This means that the earlier you start saving and investing, the more money you can accumulate in the future. For example, if you start a monthly SIP of ₹5,000 at the age of 25, you can accumulate a corpus of approximately ₹2.24 crore by the age of 60. However, starting the same investment at the age of 35 would only result in a corpus of approximately ₹93 lakh. This means that a delay of just 10 years could result in a loss of approximately ₹1.30 crore.

What to do if you lose your job?
The Investment Cafe explained that if you lose your job or face financial difficulties, you should not stop investing; you should simply pause it and restart it when your circumstances improve.

Avoid taking loans
These days, easy access to loans and high expenses can hinder young people's savings. Therefore, take loans only when necessary, not to fulfill hobbies. The more unnecessary purchases you make, the more your debt will increase, and your savings will decrease. Mutual fund investments are subject to market risks. Read all plan documents carefully.

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