Financial planning is of paramount importance for youngsters as it lays the foundation for a secure and prosperous future. In today's fast-paced and uncertain world, early financial planning can make a significant difference in achieving personal goals, maintaining financial stability, and building long-term wealth.
Ruhani Nagpal, a third-year undergraduate student of Ramjas College, University of Delhi, tells MintGenie in an interview how she feels its essential to calculate the Return on Investment (ROI) of any decision, considering both monetary and non-monetary aspects.
She is a finance & consulting enthusiast who holds the position of Director at Enactus Ramjas and recently represented India on the global stage at the Enactus World Cup. Furthermore, she is serving as the National President at the Impact Consulting Council of WICCI, leading a diverse cohort from different backgrounds.
Edited Excerpts:
What does money mean to you? Is it the most important factor when it comes to your life decisions like what to study, career and so forth?
I believe that money plays a crucial role in living a desired and independent life. While it is not the sole factor in achieving a quality life, it undoubtedly holds great importance. When making life decisions, financial considerations become essential. However, it's vital to plan strategically and work diligently to avoid compromising on important aspects of life due to financial constraints.
In my view, investing in oneself is paramount. Education, knowledge, and skills are the pathways to attain financial freedom. Life decisions should be a combination of multiple factors, not solely driven by money. It's essential to calculate the Return on Investment (ROI) of any decision, considering both monetary and non-monetary aspects.
What do you spend your money on every month at the moment? Can you give a breakup in percentage terms?
As a day scholar, a significant portion of my expenses is allocated to travel, alongside food, educational courses, and stationary. Specifically, my spending breakdown is as follows:
• 40% on traveling: Given the need to commute to and from classes and various places, transportation expenses form a major part of my budget.
• 35% on educational courses & stationary: Investing in my education is crucial, and this includes expenses on courses, books, and necessary stationary materials.
• 25% on food: Ensuring proper nutrition and also eating outside food constitutes a substantial part of my spending.
What are the things you want to spend money on?
I believe in investing my money in experiences that bring happiness and enrich my life. Exploring exciting places and going on vacations are activities that I cherish, as they not only provide me with unforgettable memories but also contribute to my overall well-being.
The calming effect these experiences have on my mental health is the best reward for all the hard work I undertake in my daily life. I consider these adventures as essential investments in my personal growth and fulfillment.
Do you save money? If yes, how frequently and what do you do with this money?
Yes, I've started maintaining a budget soon after I entered college. I do save some portion of money every month. It usually varies at this point since I'm a college student and haven't started earning with full-time work. I usually use this money for my SIP, which has a 15-year lock-in period, and sometimes I use this saved amount for shopping things that I had been postponing.
What does having a job mean to you? What are the top two factors you will want to think about when deciding a company to work for?
Having a job is an opportunity for personal and professional growth. It allows you to explore your chosen field, build valuable connections, learn from experienced colleagues, and take steps towards achieving financial independence.
For me, while deciding on a company to work for, the top two factors would be, first of all, whether the role offered aligns with your long-term goals, and secondly, what are the growth prospects by being in that firm and in that role. I have observed that some freshers solely focus on the highest salary package (LPA), which is understandable as financial stability is essential.
However, I believe that the job role's relevance and the knowledge gained from the job are the determining factors of one's worth in the long run. The effect of compounding, which can be seen in various aspects of life, reinforces the idea that continuous learning and growth can have a profound impact on one's career trajectory and overall success.
What do you think about investing your money? If you have a certain amount of money set aside, will you want to invest it in the stock market, mutual funds, or do you just keep it in your bank savings account?
I think investing your money is extremely important, and the sooner a person realizes this, the better, as the effect of compounding is significant. If I have a certain amount of money set aside, I will definitely not keep it only in my savings account when I know that the potential for growing the same amount in the same time could be greater in other avenues.
Mutual funds are surely a good way to invest, depending upon one's goal and time horizon. In my case, I would have diversified my investments, definitely investing some portion in the stock market and some in mutual funds.
Do you think you have an understanding on how to save and invest? If yes, how did you learn? If not, are you trying to learn?
Yes, I have a good understanding of savings, investments, and wealth creation, primarily due to my commerce background. The concepts I learned in my curriculum and the wealth management and finance courses I enrolled in formed the basis of my knowledge. However, the real understanding and learning came from practical exposure and trying out different strategies, moving beyond mere theoretical concepts.
By gaining hands-on experience and applying theoretical knowledge to real-world situations, I obtained valuable insights and a deeper comprehension of the subject. This combination of theory and practice allowed me to develop a more holistic understanding of savings, investments, and wealth creation.
Do you follow social media influencers and follow their investment advice?
Yes, I follow a few social media influencers, but primarily for the purpose of learning new concepts and techniques. However, I am cautious about blindly following their advice or tips. Instead, I prefer to conduct my own research and evaluate the prospects of their recommendations in overall terms before implementing anything into my own practices.
Do you talk to your mother or your father about money and learn from them or follow their advice?
Yes, I frequently engage in discussions about money, stock markets, and investment avenues with my parents. I find these conversations to be highly informative as I get to learn from their experiences and insights. Additionally, I also share what I learn through my courses and curriculum with them.
These discussions provide me with valuable perspectives and a deeper understanding of financial matters. Learning from my parents' experiences allows me to gain practical knowledge and real-world lessons that go beyond what I find in textbooks or formal education.
In turn, sharing what I learn in my courses and curriculum helps my parents stay updated with the latest information and trends. It also gives me an opportunity to reinforce my own understanding by explaining concepts to them.
