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From the Executive Editor

From the Executive Editor

In the cover story for this issue, MONEY TODAY set out to explore intelligent investing among the country’s new prosperous youth.

In youth and beauty, wisdom is but rare. Over the centuries since Greek poet Homer said these words, plenty has changed—especially in India. The most significant is the reduction in the average working age, and with that the age at which youth start earning. It’s common to find teens who work for their pocket money or fresh graduates with starting salaries which are higher than what their fathers earned at the peak of their careers. This wouldn’t have happened if the youth (many of who are also beautiful) had no wisdom.

But don’t laugh off Homer yet. Though young India is earning well and spending better than ever, financial wisdom is still rare. By wisdom we mean knowledge and understanding to use today’s income and opportunities to create a life-time of wealth. In the cover story for this issue, MONEY TODAY set out to explore intelligent investing among the country’s new prosperous youth. What we found in city after city were stories of financial ignorance bordering on innocence. This is not to say that music, food, games and clothes—which are all big items of spending among youth— are bad investments. But they aren’t enough. Not enough to ensure that today’s good life is not at the expense of tomorrow’s.

The youth have the incentive, opportunity and obligation to invest better than they currently do. The incentive is the oft-explained yet not oft-implemented power of compounding. As we explain on page 35, this incentive could be worth crores of rupees. The opportunity comes in the form of choice of investments. Till just two years ago, even the most savvy investors had to make compromises on the quality of investments they made to save income tax. But post-July 2005 when the Government replaced Section 88 with Section 80C in the Income Tax Act, taxpayers don’t have to make such compromises. And youth can make more of this freedom to invest than people of other age groups.

The obligation to invest better is the easiest to understand. If money is coming easier and earlier to today’s youth, so is insecurity— insecurity of job and earnings. Although rising job insecurity is being compensated by increased employment security, creating a cash cushion is the best way to negotiate a good deal in any job market. The biggest misconception one can have on investing early is that it will be at the expense of good life. The takeaway of our cover story is that good life and good investment can go hand in hand. Start your investment Odyssey today.

Rohit Saran