As they always say well begun is half done, sameway as we start planning for our financials goals at early age we reach to our financial goals earlier. Many sucessful people in life including marquee investor Warren Buffet started investing as early as age of 14.
As we grow our risk taking ability changes, amount of risk one can take at early age becomes difficult at later part. Most of us tend to ignore investing in earlier part of life when the income usually is lower considering it small and often do not understand such small savings are equivalent to any other higher saving we make at latter part of life with compounding effect.
|
Year |
Corpus |
Investment |
| 1 |
20 |
8,854,464 |
10,000 |
| 2 |
25 |
19,351,840 |
50,000 |
| 3 |
30 |
16,917,735 |
100,000 |
| 4 |
35 |
200,000 |
50,000 |
| 5 |
40 |
500,000 |
50,000 |
| 6 |
45 |
1,000,000 |
50,000 |
| 7 |
50 |
9,263,889 |
1,500,000 |
| 8 |
55 |
5,399,108 |
2,000,000 |
| 9 |
60 |
3,540,000 |
3,000,000 |
As you can see from the Graph above 10,000 rupees saved at the age of 20 gives higher investment value at the age of 60 than 20 lacs invested at the age of 55. Ten thousand of saving grows into 88 lacs rupees at the age of 60 but 20 lacs grows only to 54 lacs. This is the reason they say compounding is the 8th wonder so earlier you start investing easier it gets for you to plan for
