Benefits of SIP/Early Investmen


Benefits of SIP/Early Investment

People don't become wealthy by accident. You have to be determined to do the right things to create wealth. Since it starts with mindsets, we suggest that you nix these three common, yet costly, habits


1) Procrastination
“I can’t afford to invest right now. I’ll do it next year once the company reinstates bonuses.” Sounds familiar?
Procrastination is a bad trait in itself, but can be disastrous when it comes to investing. Procrastinate on your diet if you need to. But don’t delay on your savings plan. The longer you wait, the more it works against you. Compounding is a mathematical computation that works with time on its side.

Don’t wait for your next bonus to invest. Also, as your salary or income increases. The more you delay, the more it reduces the amount of time your money has to work for you. If you had invested Rs 2,000 per year over a decade, the value of your investments at the end of the time period would be far greater than had you started investing Rs 4,000 per year halfway through that period.

Let’s say that you start saving at the age of 25 with the purpose of accumulating Rs 1 crore by 65. For ease of understanding, let’s assume the rate of return as 9%. To amass this corpus, one would need to invest Rs 2,140 on a monthly basis for the next 40 years.

Delay this exercise by just 5 years. If one starts investing at the age of 30, acquiring the same corpus would require an investment of Rs 5,460 every month. Alright, that too sounds doable. Now let’s push it back further. If one starts investing by 50, s/he would have to shell out Rs 51,700 every month for the next 10 years to reach the target of Rs 1 crore.

Start now.


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