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It is a delight to see aspiring youngsters – the drive, the energy to moonlight and chase their dreams! It brings a breath of hope for a vibrant society and hard working young nation.

What should a young earner do so that, not only does he/she use his/her youthful energy to grow in career and life but also use the time available to him to create prosperity for him/her self and the family.

Here are nine mantras an individual can follow to lead a successful financial life:

1. Understand that in last 70 years, India has moved from being a feudalistic economy to social democracy and now capitalist democracy. What worked for your grandfather didn’t work for your father and what worked for your father will not work for you.
2. Understand what you do not know and seek fiduciary financial guidance. After all when you do not know flying, you trust a trained pilot and not risk your life by trying to pilot an aircraft.
3. Understand that insurance is not an investment. It is a tool to manage financial risks. You need to buy life insurance only if you have financial dependents and not enough wealth. In that case you only need a term insurance policy and nothing else.
4. Understand that long term wealth creation is a boring activity. Excitement is reserved for short term trading and betting activities. Do as you would nurture a garden of sowing, tending, growing and reaping.
5. Understand the power of compounding. If you start early, compounding will make all the difference between your retiring rich or poor.
6. Understand that twenties forms the foundation of your financial life. If you mess up in your twenties, your thirties will be spent undoing the damages of twenties. Forties will be spent trying to catch up with all life goal expenses. And by the time you reach your fifties, you can see retirement around the corner. Whole life is  spent working for money. Contrast this when you do all the right things in twenties. The savings and investments of twenties will continue to grow in your thirties. When your earnings as well as expenses peak in forties the wealth from twenties will continue to grow and you might even be able to retire right in your fifties. And you will realise how easy life can be when money works for you.
7. Understand that there are only four asset classes to invest:

1. 1. Equity – owning the business
   2. Debt – Loaning to business
   3. Real estate – Real asset
   4. Gold – Commodity

8. Understand the risks and returns associated with them and chances are that you will never go wrong.

KISS – Keep it Simple Silly. Follow your asset allocation and go for simple investments.

And remember – if you touch luxury, it will become a necessity. A necessity with its presence does not make you happier but its absence can make you terribly miserable. So, tickle yourself and do not rush to indulge in luxuries till you gain financial independence.

(The author is a SEBI registered Investment Adviser. Views expressed are personal)