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[OPEN LETTER TO A 20-YEAR-OLD INVESTING HIS FIRST SALARY]



There’s absolutely no doubt that inflation will EAT your money.


And many fintech firms will make a lot of money by using your fear to upsell their products.


Influencers will partner with these fintech startups to ‘subconsciously’ influence you to invest in Altcoins, commodities, NFTs, ‘multi-bagger’ equities, and whatnot.


Your friends will ‘invest’ half their salaries in the quest to become a ‘millionaire’ 10 years later, and you will succumb to the FOMO.


But here is the reality -


There is no ‘guaranteed’ hedge to inflation!


If everyone puts their money in a ‘guaranteed’ inflation hedge that asset’s price will climb to a point that it will cease being an inflation hedge.


So in your 20s, should you really be predicting market moves? NO.


You will NOT become a ‘millionaire’ by investing in stocks.


Then where should you invest your time, money and energy ?


1. Invest in highly leveraged skills :


Spend less time searching for YouTube videos to predict market moves, and spend more time developing a highly leveraged skill.


If you are a replaceable member of the labor force, you have to accept the market price for your work.


If you are the best of the best, you can charge whatever price you want!


2. There’s no need to become a ‘crorepati' with a 50k monthly salary :


When you are young, you don’t have much money. So if you invest 30k from a small paycheck, it hurts. You compromise on new experiences and learning. And you will not create 'memorable' memories of your 20s.


Your 50k/month salary will be NOTHING over the years. Your 1 year saving in your 30s will be more than your 10-year savings in your early 20s.


Then what’s the point of sacrificing your experiences and lifestyle?


The poorest person is the one with the richest bank account but no time for living experiences. You will never get your youth back!


3. Invest in experiences :


Backpack to Europe (live in hostels), explore unique restaurants with your date in Delhi and snorkel on islands in the Indian Ocean. But live on the edge while you can. Travel and explore the world- it will absolutely BLOW your mind!


Save-invest-hustle culture has become toxic. Don’t save/invest everything in your 20s.


Please don't mindlessly buy 'investing' narratives to the point of not living your life.


Compounding in skills, relationships, and experiences will yield better returns than pouring half of your salary into public markets.


If you are interested in learning about GGI's MBA Scholar program, you can learn here.


 

Author- Naman Shrivastava, Cofounder Global Governance Initiative, Ex- United Nations, Former Government of India Advisor


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