The Power of Compound Interest

START EARLY & WIN THE RACE…!!!

Before starting Financial Planning know The Power of Compound Interest.

In the game of Investment Time is the important player. Investing only money cannot win the race. You have to invest both time and money simultaneously.

Albert Einstein once said that, "The Compound interest is the greatest Force in the Universe". He also said that. "The Compound interest is the 8th wonder".

Youngsters in 20s and early 30s those who have just started earning may argue that retirement is still decades away so why to hurry?

Let’s look at a small example.

Ramesh started investing Rs.5000 each month for 10 years from the time he became 25. Umesh started investing Rs.5000 each month for 25 years from the time he became 35. Note that Ramesh invested Rs.5000 monthly for only 10 years. Umesh invested Rs.5000 monthly for 25 years.

Now what do u thing who will have more money at the age of 60.

Assuming that their money grows at 15% per year, at age 60 Ramesh will have Rs.4.6 crores (Rs.4,61,18,004).

Umesh will have Rs.1.46 crores (Rs.1,46,82,718).

You might wonder how this happened, even though Umesh invested Rs.5000 for 25 years still he is much behind than Ramesh who have started investing just 10 years early. Initially your money will grow at a slow rate. But once the money grows to a big amount the rate of growth will be very very high! So, basically you need a lot of time to reach a very high rate of growth. Hence time and money both are important factor in investment.

Morale: No matter at what age you are, If you have not started investing start it now. The best time of investment was 10 years before & the second best time is NOW.