I know investing is not as exciting as weekend plans, but it is way more important for your future. Women under 25 need to know how to start building wealth by investing in mutual funds in 2024. And trust me, it’s not as complicated (or boring) as it seems. So, here’s how to invest money as a woman under 25.

What actually are mutual funds?

A mutual fund is a way for people to invest their money in a bunch of high quality options without trying to decode each one. You decide how much you want to invest every week, every month, every quarter, or every year. A professional fund manager then decides where to invest that amount, such as in stocks, bonds, or other assets.

Investing in mutual funds allows your money to grow over time, making it a convenient option while you focus on your life and career.

I know your dad and uncle might be saying that Fixed Deposits (FDs) are the way to go because they’re safer. But here’s the deal – while FDs are safe, their returns are pretty low, often around 4-7% annually. Now compare that to mutual funds which can give you returns of 9-12% or more over the long term. Sure, there’s some risk involved, but over time, you can minimise that risk. And that’s where your age comes in handy. You have time on your side to recover from any market dips.

Why should women invest?

Financial independence isn’t just a buzzword – it’s empowerment. Too often, women end up delegating financial decisions to others, but those days are long gone. When you invest, you’re taking charge of your future. Imagine this: you want to travel, buy a house, or start your own business. Having your own wealth gives you the freedom to make those decisions without depending on anyone else.

Also, think about the gender pay gap. While it’s shrinking (thankfully), investing can be a way to bridge that gap. Mutual funds are a powerful tool for women to grow their wealth in 2024.

Moreover, the best thing about starting early is compound interest. When you invest in mutual funds, your money starts earning interest, and then that interest earns even more interest. If you start when you’re under 25, even a small investment can expand into something much bigger by the time you’re in your 30s or 40s. So, while your future self is busy being fabulous, your money could also be growing on autopilot.

The beauty of mutual funds is that you don’t need a huge sum to get started. Platforms like Paytm Money, Groww, and Zerodha allow you to start with just ₹500 per month. That’s like cutting back on two coffees a week. You can choose from a variety of funds based on how much risk you’re willing to take. If you’re okay with a bit of risk, equity mutual funds (which invest in stocks) could be your thing. Want to play it safe? Debt funds (which invest in safer options like bonds) might be more suitable. 

Are mutual funds risky?

One of the biggest myths about mutual funds is that they’re “too risky.” Yes, there’s some risk involved, but with the right research (or professional help), you can choose funds that align with your goals. And if you’re investing for the long term (which you should be), the risk is generally mitigated. 

To minimise risk, you can also opt for Systematic Investment Plans (SIPs), where you invest a fixed amount every week, month, or quarter. This way, you don’t have to worry about market timing; your money grows steadily over time.

One of the golden rules of investing is diversification, which is a fancy way of saying, “Don’t put all your eggs in one basket.” With mutual funds, you’re automatically diversifying. Your money is spread across different stocks or bonds, so even if one doesn’t do well, others might balance it out. It’s like having multiple side hustles – if one doesn’t work, the others keep you afloat.

But mutual funds are not a get-rich-quick scheme. They work best when you give them time. Whether you’re saving for your future home, a dream vacation, or just a solid financial cushion, starting early means you’ll have a lot more flexibility down the road.

Investing in mutual funds is one of the smartest moves you can make in your 20s. The sooner you start, the more time your money has to grow. Trust me, your future self will be so glad you started today.

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