Investing at An Early Age – Learn from Your Favourite Stars such as Sachin Tendulkar, Shahrukh Khan & Anuskha Sharma
4th MARCH 2023
Investing at a young age is one of the best financial decisions you can make for yourself. The power of compounding can work wonders in building wealth over the long term. The earlier you start investing, the more time your money has to grow.
Compounding is when you earn interest on your principal investment as well as the interest it earns over time. This means that your money can grow exponentially over the long term. Let’s take an example of how compounding can work.
Suppose you invest Rs. 10,000 at an interest rate of 10% per annum. After the first year, your investment would have grown to Rs. 11,000. In the second year, you would earn interest not only on your initial investment of Rs. 10,000 but also on the interest earned in the first year, which is Rs. 1,000. So, at the end of the second year, your investment would be worth Rs. 12,100. In the third year, you would earn interest on Rs. 12,100, which is Rs. 1,210. This cycle of earning interest on your principal and the interest earned continues over time, leading to significant growth in your investment.
Now, let’s take some examples of cricketers and Bollywood actors who have made the most of the power of compounding by investing at a young age.
Sachin Tendulkar: The legendary cricketer started investing in stocks at the age of 18. He has a diversified portfolio, which includes investments in blue-chip companies like HDFC Bank and Nestle India. His investment strategy is to hold onto his stocks for the long term, allowing them to grow through the power of compounding.
Shah Rukh Khan: The Bollywood superstar has been investing in stocks since his early days in the film industry. He has a significant stake in the Kolkata Knight Riders, which is valued at over Rs. 600 crores. He also has investments in blue-chip companies like Nestle India and HDFC Bank.
Anushka Sharma: The popular actress has been investing in stocks since she was 21. She has a diversified portfolio, which includes investments in companies like Sun Pharma and Tata Consultancy Services. Her investment strategy is to hold onto her stocks for the long term, allowing them to grow through the power of compounding.
By investing at a young age, these celebrities have been able to build significant wealth over time. The power of compounding has worked in their favor, and it can work for you too.
If you’re new to investing, it’s essential to understand the fundamentals of investing before you start. Here are some tips that can help you get started:
Start small: Start with a small amount and gradually increase your investments over time. This can help you get comfortable with the stock market and minimize your risk.
Diversify: Invest in a diversified portfolio of stocks to minimize your risk. This can include blue-chip companies, mid-cap companies, and small-cap companies.
Invest for the long term: Invest in stocks with a long-term perspective, allowing the power of compounding to work in your favor.
Stay informed: Keep yourself informed about the stock market and the companies you’re investing in. Follow market trends, read news articles, and analyze company financials.
Investing at a young age can help you build significant wealth over time. The power of compounding can work wonders in growing your investments. By following these fundamental investment techniques, you can start your investing journey and build a strong portfolio for the future. Choose Shivam Parikh as your investment advisor with ICICI Direct to give you the right advice through experts in the field to help you and your children create wealth.
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