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The Power Of Investing

Feb 25, 2016 | 2 minutes |
Rohit Gupta

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What if I told you if you delay your financial planning (investing ₹1000/month) just by 7 years, you would miss the chance of owning an Audi A3. Stunned?

Welcome to the very simple illustration of complex financial planning:
Consider two friends of same age, Mr. Active and Mr. Lazy are the same age of 25. Mr. Active started investing at the 25 with initial capital of ₹10,000 and investing ₹1000 per month with an interest of 14% (Average return of equity of long term is ~15% in India). By the time Mr. Active reaches 57, he will have ₹66 lakh in his account.

On the other hand Mr. Lazy, he believes that he has lots of time. He has no money to invest. He can invest it later. He thought of investing when he would be more stable in the career. So he somehow started investing at the age of 32 with same capital and same monthly deposit. By the time Mr. lazy reaches 57, he will have ₹26 lakhs in his account. It is said that if you start well you are half done and here is the example. The difference in saving is ~ ₹40lakh. This is the power of proper financial planning and compound interest. Here you can see the exponential growth of the capital.

When we talk about investing and financial planning time is really an asset which you need to preserve carefully.
"It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for" - Robert Kiyosaki

Start early and be persistent because the key of making money is to stay invested. Reference: www.nseindia.com/