Investments to help Build Long-Term Wealth
Your 20s are a time of exploration, learning, and building. They’re also the best time to make strategic financial decisions that will benefit you for decades to come. Whether you plan to build your future in India, move abroad, or find a balance between the two, investing in the right areas can help you achieve long-term wealth and financial independence. Here are the fine smart investments to make in your 20s that will help you build a solid foundation for the rest of your life.
1. Invest in Education and Skill Development
Education is not just about degrees; it’s about equipping yourself with skills that remain relevant in an ever-changing job market. In India, professional courses like MBA programs or technical certifications often cost between ₹5 lakh and ₹25 lakh. However, their ROI is undeniable when aligned with career goals.
Take Sundar Pichai, who grew up in Chennai and pursued engineering at IIT Kharagpur before earning a scholarship for further studies at Stanford University. His education, though expensive, laid the groundwork for his remarkable journey to becoming the CEO of Alphabet Inc.
Moreover, the India Skills Report 2023 revealed that individuals with specialized skills earn 3 times more than their peers. Even if you don’t have access to high-end degrees, platforms like Coursera, Udemy, and Skillshare offer affordable courses in high-demand areas like data analytics, AI, and digital marketing. Imagine spending ₹10,000 on an online data science certification and landing a job with a ₹10 lakh annual package—an incredible return on investment.
For Indians who move abroad, certifications in global languages, coding, or business strategy can give you a competitive edge in foreign markets. The earlier you invest in learning, the longer your skills will work for you.
2. Start Early with Mutual Funds and SIPs
If you think investing is only for the rich, think again. Mutual Funds, especially through Systematic Investment Plans (SIPs), allow you to invest small amounts consistently and build wealth over time. The magic of compounding works best when you start early.
For example, if you start investing ₹5,000 a month at the age of 25 in an equity mutual fund that offers an average annual return of 12%, you could accumulate over ₹1 crore by the time you’re 50. But if you delay by just five years, the corpus shrinks to ₹60 lakh. That’s the cost of waiting!
This isn’t hypothetical. India’s mutual fund industry has seen massive growth, with retail investors contributing to its 20% annual expansion over the last decade (source: AMFI 2023). For Indians working abroad, keeping some investments in Indian mutual funds not only diversifies your portfolio but also lets you benefit from India’s rapidly growing economy.
3. Buy Health and Life Insurance
When you’re young and healthy, the last thing you might think about is insurance. But this is exactly when it’s most affordable—and crucial. A medical emergency can quickly derail your financial plans, and without insurance, the costs can be crippling.
Imagine a 25-year-old purchasing a comprehensive health insurance policy in India for ₹6,000 per year, offering coverage of ₹5 lakh. Now compare that to the average cost of hospitalization in urban India, which exceeds ₹75,000 for a single stay (source: IRDAI 2023). The financial shield provided by insurance ensures that your savings remain intact for wealth-building rather than unexpected expenses.
For those relocating abroad, term life insurance or international health plans can secure your family’s future and offer global coverage, often at better rates if initiated in your 20s.
4. Invest in Real Estate and REITs
Real estate has long been a favored investment for Indians. While purchasing property might seem out of reach in your 20s, investing in Real Estate Investment Trusts (REITs) is a more accessible option. REITs allow you to invest in real estate without the need for large capital and provide regular dividends.
For instance, a Bengaluru-based REIT offers units at ₹300 each, allowing young investors to enter the real estate market with minimal risk. Over the last decade, REITs in India have consistently delivered returns between 8% and 12% annually, while providing liquidity compared to traditional real estate investments.
Moreover, according to a 2023 report by Knight Frank India, the Indian real estate market is projected to grow to $1 trillion by 2030. If you plan to move abroad, investing in emerging cities like Hyderabad, Pune, or tier-2 towns can secure a property that appreciates over time and generates rental income.
5. Start Building Your Personal Brand
We live in an era where a strong personal brand can be more valuable than a high-paying job. Whether you’re a content creator, an aspiring entrepreneur, or a corporate professional, showcasing your expertise online can attract incredible opportunities globally.
Ranveer Allahbadia, better known as BeerBiceps, started his YouTube channel as a fitness enthusiast. Today, he is a household name, earning crores through brand deals, content creation, and digital products. His early investment in building an online presence allowed him to capitalize on India’s growing digital economy.
In fact, LinkedIn’s 2023 Global Trends Report highlights that professionals with active online profiles are 40% more likely to land international opportunities. By dedicating time to creating quality content, engaging with industry leaders, and consistently showcasing your skills, you can build a brand that opens doors you never imagined.
The Power of Starting Early
The earlier you start, the more time your money and efforts have to grow. According to the World Bank’s 2023 Economic Outlook, India’s economy is expected to grow at 6.5% annually, providing abundant opportunities for wealth creation.
Your 20s are a unique time when you can take calculated risks, learn from failures, and build a financial foundation that supports your dreams. Whether you aim to thrive in India, move abroad, or straddle both worlds, these five investments can set you on a path to success.
Sources:
- Association of Mutual Funds in India (AMFI), 2023
- Knight Frank India, Real Estate Report 2023
- LinkedIn Global Talent Trends Report, 2023
- Insurance Regulatory and Development Authority of India (IRDAI), 2023
- World Bank Economic Outlook, 2023
Remember, the seeds you sow today will grow into the financial forest you enjoy tomorrow. Start now and secure your future!