For most people, investing at the start of their career may not be a priority. When i started my career i was only interested in everything other than investing. I never bothered about saving. I wish i could go back in the past and do something about it. Most of you may want to change it after realizing what they have missed. I don't want to demoralize anyone but it is never late to start. You can make for the lost the lost time and I will explain how you can do it.
When you are single, you can save maximum. Once you are married and have children then your expenses increases exponentially. You may want to shift to your own home and have a car, for which you may take loan. After paying loan, credit card bill, children school fee and other bills you won't be left with much money to invest. This gives you a very important and rational reason to start early.
One of the greatest misconception about investing is that it takes lot of money to make lot of money. This is completely wrong. For some, it is an excuse to procrastinate investing. What is takes to make lot of money is time and disciple to invest regularly. If you have time with you, then even with small amount you can make lot of money. Lets try to understand with a case study.
When you are single, you can save maximum. Once you are married and have children then your expenses increases exponentially. You may want to shift to your own home and have a car, for which you may take loan. After paying loan, credit card bill, children school fee and other bills you won't be left with much money to invest. This gives you a very important and rational reason to start early.
One of the greatest misconception about investing is that it takes lot of money to make lot of money. This is completely wrong. For some, it is an excuse to procrastinate investing. What is takes to make lot of money is time and disciple to invest regularly. If you have time with you, then even with small amount you can make lot of money. Lets try to understand with a case study.
Case Study
Everyone is trying to save for his/her retirement. Ashish starts at the age of 25, Sunita at 30, and Sanjay at 50. Everyone invests Rs 5000 per month till the age of 60. This gives Ashish 35 years while Sanjay has only 10 years to invest. Lets assume a conservative return of 12% on their investments. Below table shows the difference in their retirement corpus at the age of 60.
Ashish corpus is much more than that of Sanjay. Sanjay has only Rs 11 lakh while Ashish has huge corpus of Rs 2.75 crore with only Rs 5000 pm investment. Seeing this, Sanjay wishes he could go back in the past and correct his mistake. You can never change the past but you can still change your present.
If you look at the table above, you will notice that delaying by 5 years reduces your retirement corpus by approximately half. It's not the amount of money which makes you rich, it's the time for which you invest makes you rich.
You can decide your own figure using the calculator below -"http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php"
Lets say Ashish (25), Vishesh (40) and everyone in above case study wants to have a retirement corpus of Rs 1 crore at the age of 60. Below table shows the difference in the amount of money each of them need to invest to reach their goal of Rs 1 Crore. Ashish has lot of time with him, which is his biggest advantage.
Now, the graph is exactly opposite of previous graph. Sanjay needs Rs 45000 while Ashish needs only Rs 1820 to reach his goal of Rs 1 Crore at the age of 60. If you are late then also you can achieve your goal but you have to shed more money. Lets compare the journey of Ashish(25) and Khushi(35) to reach their goals.
Investment done by Ashish = 1820 x 35 x 12 = Rs 7,64,400
Investment done by Khushi = 5880 x 25 x 12 = Rs 17,64,000
Khushi had to pay Rs 10 lakh more for delaying by 10 years. This gives you a reason to start early. Khushi also reached her goal of 1 Crore with some extra monthly investment. You can also make for your lost time by investing some more amount. Start today.
Hope you like this article and will start from today...
Happy Investing!!!
Ashish corpus is much more than that of Sanjay. Sanjay has only Rs 11 lakh while Ashish has huge corpus of Rs 2.75 crore with only Rs 5000 pm investment. Seeing this, Sanjay wishes he could go back in the past and correct his mistake. You can never change the past but you can still change your present.
If you look at the table above, you will notice that delaying by 5 years reduces your retirement corpus by approximately half. It's not the amount of money which makes you rich, it's the time for which you invest makes you rich.
You can decide your own figure using the calculator below -"http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php"
How to make for lost time
Do not ever feel it is too late to start. Start from today. Many doesn't start investing at the age of 25. If you are 30, 35 or 40 years of age and want to make up for the lost time, then you can still achieve you goal. Lets see how you can do this.
Lets say Ashish (25), Vishesh (40) and everyone in above case study wants to have a retirement corpus of Rs 1 crore at the age of 60. Below table shows the difference in the amount of money each of them need to invest to reach their goal of Rs 1 Crore. Ashish has lot of time with him, which is his biggest advantage.
Now, the graph is exactly opposite of previous graph. Sanjay needs Rs 45000 while Ashish needs only Rs 1820 to reach his goal of Rs 1 Crore at the age of 60. If you are late then also you can achieve your goal but you have to shed more money. Lets compare the journey of Ashish(25) and Khushi(35) to reach their goals.
Investment done by Ashish = 1820 x 35 x 12 = Rs 7,64,400
Investment done by Khushi = 5880 x 25 x 12 = Rs 17,64,000
Khushi had to pay Rs 10 lakh more for delaying by 10 years. This gives you a reason to start early. Khushi also reached her goal of 1 Crore with some extra monthly investment. You can also make for your lost time by investing some more amount. Start today.
Hope you like this article and will start from today...
Happy Investing!!!
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