Online brokerage platform co-founder Nithin Kamath has shared some tips with the millennials and Gen Z professionals on retirement and future financial planning.
In a long Twitter thread, Kamath offers valuable lessons to the young blokes, citing that the technological developments have led to the retirement age dropping to 50 and life expectancy going up to 80 due to medical advancement.
Kamath stresses on the need to financially plan to ensure that life between the age of 50 and 80 is a smooth one.
The entrepreneur who along with his brother Nikhil is worth $3.45 billion according to Forbes, said that retirement crisis will be the biggest crisis for most of the countries 25 years from now.
Citing that earlier generations got ‘lucky with long-term real estate and equity bull markets that helped create a retirement corpus, Kamath said this situation seems unlikely in the future.
Here are the few tips Kamath shared with the millennials and the Gen Z investors.
1. He advises the youngsters to stop getting triggered by ‘everyone trying to lend and stop borrowing to buy things’ they don’t need or depreciate in value.
2. Kamath advises the young investors to start saving early. Diversifying across FDs, G-Secs and SIPs or index funds or exchange trade funds (ETF) are some of the options. According to him, stocks are probably still the best bet to beat inflation long term.
3. Kamath advises everyone to get a comprehensive health insurance policy for self and everyone in the family. “One health incident is enough to push most people into financial ruin or set them back many years financially. Jobs don’t last forever, hence one policy outside of what is provided at work”, he added.
4. Most importantly, the Zerodha co-founder said the dependents should be covered if something happens to the investor. “ Buy a term policy with adequate cover. In the worst case, 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.