How the smartphone generation can be the 'smart money' one

Today’s youth, better known as ‘Gen Y’ is considered to be smarter than the previous generations. There is no denying the fact that this ‘smart phone’ generation is moving rapidly. In the context of growth and stability of their personal financial profiles, the only question we need to ask is “can this quick learning mindset be harnessed and shown the right direction?”

The right levels of ethics and financial awareness need to be taught and ifabsorbed in the correct spirit and understood fundamentally, this generation can work wonders with their own personal financial life, which in effect can reflect positively on our economy in the long term. The onus to expedite this exciting journey for the youth is on the professionals in the field of Financial Advisory. This fraternity consisting of Certified Financial Planners (CFP) and investment advisors should ideally go all out in focusing on this generation and guide them in the right direction.

The immense and exciting job opportunities created nowadays in new sectors of our economy with good pay scales has widened the career-building horizon for this youth brigade. Along with this, the urge to start earning early has put decent pay packetsin the hands of the youth. As things start moving positively for them, the spending habits would naturally gather momentum. The urge to splurge and spend indiscreetly would be at its peak.

Given below are five important pointers that the youth can imbibe and implement to move towards achieving their goals and financial prosperity.

1) Financial awareness: Creating financial awareness about the relevant investment products is primary. With the heavy influence of media, the financially immature and young mind is bound to be misguided and may take wrong financial decisions at the early stage of their working life. This, in some cases, can have serious implications on an individual’s financial life in future. The youth need to be empowered with true financial knowledge.

2) Understanding the basics: The simple basics of personal financial planning need to be rooted in their system. The importance of budgeting, regular investing from the monthly surplus and protecting ones family through adequate and right form of insurance are the grassroots which need to be inculcated on priority. The aspect of financial introspection has to be explained in order for the youth to look at the real picture and way ahead. They shouldhave fun, but not at the cost of compromising or losing their core fundamentals and ethics with relation to their personal finances.

3) The age advantage: The biggest advantage this generation has is of having age on their side. At the age of 21, one can easily say that they have 35 years of working life ahead of them. A disciplined and focused investment plan with an appropriate asset allocation topped with the power of compounding can work wonders with their investment portfolio. An appropriate life insurance cover taken in these early years with the least possible premium would give ample protection to their families in case of an unforeseen event. Similarly an adequate health insurance for an individual and his family should also be taken. These formative years is a good platform for an individual to plan and action his financial life to the best of his preference and choice.

**4) Patience-perseverance- focus:**All youngsters should inculcate the aforesaid virtues, as the benefits of long term investing are immense and crucial for achieving their financial goals.

5)Use technology effectively: The abundant use of technology and the accessibility available today can be streamlined to gather relevant financial data, analyze, compare and monitor their finances in a method, which is very easy for them to fathom and implement.

To summarize, this generation needs the right direction and path to achieve their financial bliss. It is now that the financial advisor’s role assumes greater significance.

The author is a member of The Financial Planners’ Guild, India and Founder, Full circle Financial Planners and Advisors (a SEBI-Registered Investment Adviser)