The five money mantras for youth as said by Zerodha’s Nithin Kamath

five money mantras for youth

Nithin Kamath’s success story and the astronomical rise of his stock trading platform Zerodha are known to one and all. Kamath was an early starter in the world of the stock market, earning handsomely and even losing most of it by the time he was 21. Naturally, he has a few words of advice for youngsters who are stepping into the world of investing. 

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In a recent interview, Nithin Kamath highlighted five money mantras that a young person must keep in mind.

1. Adopting investment as a habit – While enjoying the days of youth is fine, it is also the right time to start the habit of investment, be it with a small portion of your pocket money. Kamath points out that when started early, investing will eventually become a habit. If you follow Kamath’s advice on saving and invest early, you will benefit from the power of compounding too.

2. Invest in experience, not things – In your youth, you must be spending on experiences rather than on things. Kamath says that you should buy tickets to a live event of your choice rather than an expensive phone, for instance. Doing so is good for your mental faculty and skill development.

3.Index funds – A small amount invested regularly in index funds helps you amass large wealth in the long run. Index funds track the growth of stock market indices like the Nifty50 and Sensex, which have traditionally generated decent growth over long periods. Along with these investments, regular monitoring of the business news helps you gather a fair idea of how the share market functions. This will also prepare you to step up and start investing in individual stocks.

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4. Don’t invest with someone else’s money – Kamath learnt this the hard way, borrowing and investing only to lose it all in the Y2K crash in the early 2000s. He had to work hard for several years just to recover and pay back the borrowed money. Since then, Kamath believes in investing only in instruments that he understands and using his own money to do so.

5. Skill development is key – For youths, the focus should be on developing the right skills. By investing in your development, you will have the skills to attract money anyways. Rather than focusing on money, on earning X amount through shares and mutual funds, you must have the skills required to understand the market dynamics. Once you have the understanding, money will follow.

We can conclude that the trick is not to not make mistakes. Rather it is to accept your mistakes and learn from them. Nithin Kamath did so and has since built the most popular stock broking firm in India.

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