Money advice for young individuals

Aug 28, 2023

Radhika Gupta is the managing director and chief executive officer at Edelweiss Mutual Fund.

She is the youngest CEO in the asset management industry in India, but in terms of zest and passion and performance, she stands tall.

She will soon turn 40, and shares her insights to help young people embark on their money journey.

Start early.

Because of compounding, yes. Definitely. But that is NOT the only reason. Starting early helps you ease into the process, test the waters, and make mistakes on small capital.

When you start your career, you are often so neck deep into work and proving yourself that hard-earned money can just sit in a bank account. Despite being a finance professional, I waited for 2 years (since I began working) to start investing.  The wait claws at you and you start off by making rushed decisions because you feel you missed out (I did). One mistake feeds on the other.


Read and study your options well before you start investing. Young people often fall prey to the cocktail party and what-my-friend-is-investing in syndrome. It usually ends up hurting badly.

Greed could take you down. Know the value of “enough” and never take a shortcut to earn money. It is never worth it. You could fall big and you could fall hard.

Rules are not written in stone.

This is very relevant with the age rule.

The '100 minus age' rule is a guideline on how to allocate money across equity and fixed income. Investors must simply subtract their age from 100 to arrive at an approximate equity allocation, with fixed income accounting for the rest. So if you are 20 years old, then your equity allocation should be 80% of your portfolio.

Young people don’t have to have a large equity allocation just because they have time on their side. They can be, but don’t have to be. Circumstances, liabilities, risk tolerance – all must be taken into account.

For instance, highly volatile careers (like mine was back then) may call for more conservative investments. I also do believe everyone needs some liquid contingency money in debt. What if you want to start a business from savings when markets are down? I did.

Choose the asset allocation that works for you. View it through the prism of tough markets too. I really believe that the best one option is not a thumb rule, but a personalised one that doesn’t let your money sleep during the day, neither cannibalizes your sleep at night.

Simple products do not take away from your intelligence quotient.

I studied at one of the finest business schools in the world and started life trading one of the most sophisticated financial instruments - collateralised mortgages. After 17 years, I honestly believe that the best investment for me is a SIP into a balanced advantage fund and a mid / small cap fund. It gives me peace, meaningful returns to meet my goals and with daily liquidity.

Liquidity I believe is priceless. If someone wants you to lock in your money, you better be earning a serious premium and have a solid reason for investing.

Have a holistic framework and write it down.

Write down your goals. Write down your principles.

What you would invest in and why. What you wouldn’t invest in and why. What is good and bad performance. How often will you review it.

How do you view real estate?

Is gold an investment or does it have emotional and sentimental value?

What is your approach around ESOPs? How much of your wealth should it corner?

This will serve as your true north. A guide to refer to when confused. It will help you from second guessing your decisions.

Save. Invest. Enjoy.

Money has a real purpose. It enables you to fulfil your dreams. It makes life easier. It adds comfort. It creates memories. It enables moments of joy. So earning, and saving, and investing is very important. But it is not a competition to win.

Spend on things you like. My little joy was my first LV bag, my big joy was my home.

There is limited joy that your portfolio net worth can give you. But what you can do with that money is priceless. Buying your parents their first car, buying a beautiful watch for your father, providing your child with the possibility of a great education, taking your spouse on a dream vacation…

A fund redemption, when used to bring a smile to someone, is a good one!

Most importantly…

Don’t let money cannot define you or your relationships. Never let it affect your sense of worth or confidence, because it has the power to do that. Never let it affect how you behave with others either. Because people are more than their bank balance.

Disclaimer: Radhika Gupta is the MD & CEO of Edelweiss Asset Management Limited (EAML) and the views expressed above are her own. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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