No one wants to get rich slowly." Entrepreneur Ankur Warikoo breaks down how to invest in your 20s.
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00:00I'm going to have to pay my Ferrari in for a Ford Fiesta.
00:02Oh my god, share bazaar, satte wala bazaar.
00:11So the biggest mistake that most people make is try and think that money will be made very quickly
00:16and that's not possible. I'll take you back to a fascinating conversation that happened
00:20between Bill Gates and Warren Buffett. Both of them are one of the richest people that
00:24the world has seen and Bill Gates is asking Warren Buffett, hey Warren, your investing
00:28style is just so simple that you invest and you invest for a really long time
00:32and you've gotten so rich because of that. How is it that so many people don't follow
00:35your advice and get rich? And Warren Buffett says, well Bill, it's because
00:39no one wants to get rich slowly. And that's message one. If you're starting early,
00:45if you're starting around your 20s, that's the best time to start because that 10-15
00:50years that you give to your investments is going to compound at a rate that is absolutely
00:55not desirable to the human mind. Do not focus yourself on, I need to start with a lot of money
01:01to start investing. Instead, focus on how long can I invest so that this becomes a materially big
01:07amount. It's called the 50-30-20 rule and it's one of the most fundamental rules of investing.
01:20What this means is 50% of what money you make needs to go towards your needs and these are
01:27things that you can't opt out of. These will be your EMIs, these will be your bills, these will
01:32be your utilities, your food, your transportation, the necessity items that you need to spend. The
01:39key here is don't go beyond 50. So don't take on more loans than you can afford. Then the remaining
01:4530% is towards what are your needs. So these are things that you want to do because you have a life.
01:52Yes, you want to go out occasionally. Yes, you want a nice happy phone. Yes, you want good clothes.
01:57Yes, you want to take a vacation. All of that should be within the 30%
02:02and then the final 20% is what you invest and that's the discipline.
02:07FOMO is going to get you to consider investments that you may not have earlier because lately
02:14there have been a lot of FOMO investments that have been made in asset classes which are very
02:18very risky and that's great. You still want to drive that risk because it may give you a high
02:24return but it'll be foolish of you to invest in something that you do not fully understand
02:30purely because you don't know how to do it. You don't know how to do it because you don't
02:35understand purely because of FOMO. Invest in things that you understand. Invest in things
02:41because you believe in them. Invest in things because you have that money and that risk appetite
02:46too and then after that let it compound over time.