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Many people believe that starting a SIP or FD as soon as they get a job is the best financial decision. But the truth is, this strategy doesn't apply to everyone, especially young people starting their careers with a starting salary of ₹25,000. With a low income, savings are small, and the effect of compounding is very slow. In such a situation, a different path can transform your life, and if you invest money in these things in the first five years, you can earn more in the future.

What to do in the first five years?

Dedicate these five years to your "skill-building and growth phase." During this time, investing money in other things instead of savings can prove beneficial, such as learning new skills, pursuing professional courses, improving communication and presentation skills, learning digital tools, AI, and data analysis, networking with industry insiders, and traveling to understand the world. These things increase your market value, and improving skills can lead to a significant salary jump.

Why is early investment ineffective at a low salary?

When the initial salary is low, most of the money is spent on rent, food, and other essential expenses. Consequently, savings barely exceed ₹1,000 to ₹5,000 per month. This amount is a good foundation for investing, but it's too little to build a corpus worth crores. Compounding on small capital is very slow, and even after years, the amount remains small.

Therefore, the advice to "invest quickly" isn't suitable for everyone. Especially when the same money is invested in improving one's skills, income can increase manifold, and the scope for investing expands later.

What does saving ₹5,000 achieve in 5 years?
If you invest ₹5,000 every month in a SIP and assume a 10% return, the total amount in 5 years is approximately ₹4.6 lakh. This means an interest benefit of ₹1 lakh in five years. This is a gradual growth, not enough to transform a life.

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