Online brokerage platform co-founder Nithin Kamath has shared some tips with millennials and Gen Z professionals on retirement and future financial planning.
In a lengthy tweet, Kamath offers valuable lessons to the youth, citing that technological developments have brought the retirement age down to 50 and life expectancy to 80 due to medical advances.
Kamath emphasizes the need to plan financially to ensure that life between the ages of 50 and 80 is smooth.
The entrepreneur, who along with his brother Nikhil has a fortune of $3.45 billion according to Forbes, said the retirement crisis will be the biggest crisis for most countries 25 years from now.
Citing that previous generations got ‘lucky’ with long-term real estate and equity markets that helped build a retirement corpus, Kamath said this situation seems unlikely in the future.
Here are some tips Kamath shared with millennials and Gen Z investors.
1. He advises the youth to stop being exercised by ‘all those who try to lend and stop borrowing to buy things’ that they do not need or depreciate in value.
2. Kamath advises new investors to start saving early. Diversification between FDs, G-Secs and SIPs or index funds or exchange traded funds (ETFs) are some of the options. According to him, stocks are probably still the best bet to beat long-term inflation.
3. Kamath advises everyone to take out a comprehensive health insurance policy for themselves and everyone in the family. “One health incident is enough to send most people into financial ruin or set them back many years financially. “Jobs don’t last forever, so a policy outside of what’s offered at work,” he added.
4. Most importantly, the Zerodha co-founder said that dependents should be covered if something happens to the investor. “Buy a short-term policy with adequate coverage. At worst, this money in a bank FD should cover their financial needs,” he added.
5. Last but not the least, Kamath asked people to stop taking loans.
