A financial literacy letter to my younger self
India’s investment landscape is diverse, catering to various financial goals, risk appetites, and time horizons. They range from tax savings schemes (PPF, NPS, ELSS, ULIPs, Tax Saving Deposits), longer horizon and higher returns products (mutual funds, stock investments, IPOs), shorter horizons (fixed deposits, liquid mutual funds, ultra short-term debt plans), medium-term goals (ELSS, FDRs, Recurring Deposits) and longer-term goals (Equity Mutual Funds, direct equity, gold, real estate, NSCs, Bonds).
On 9th April 2024, the BSE Sensex in India touched the 75,000 mark. It was incepted in 1979 at 100 value and has compounded at a rate of 15.85% in these 45 years. India is the fifth largest economy in the world, and there is a good probability that a growth rate of 15% may well be sustained in the future, let’s say for the next 45 years, too!
With that background, let’s bring the discussion to my (hypothetical) younger self.
I am a 21-year-old female living with my family in one of the metropolitan areas. I have joined a Bank with a sound salary package. I am single, with no dependents in my family. On receiving my first salary, I was exuberant at both the thought and reality of having earned money myself.
My financial needs so far (in form of school and college education and associated expenses) were supported by my father and my extracurricular funding by my monthly pocket money, again from my father. We are an upper middle class family (but not lavishly rich), doing well for ourselves in academics and
