In the second part of our five-part series on investments, we’ll discuss the best time to invest and whether there really is a ‘right’ or ‘wrong’ time for it. In the last post, we touched upon the concept of compounding, which is almost like magic. Gains get reinvested, earning more gains and so on, kicking off a cycle of earning. At some point, you can just sit back and let your investments do all the work for you! There’s a catch, though. It takes years for compounded gains to add up to any substantial amount. This is where starting early makes a difference, since the same sum will earn you more if it’s invested earlier.
LET’S LOOK AT A BASIC EXAMPLE OF THIS CONCEPT:
Nishi opens a 10-year recurring deposit account that offers 8% interest per annum, compounded quarterly. By putting in as little as Rs. 500 every month, Nishi earns almost Rs. 32,000 in interest and receives just under Rs. 92,000 upon maturity:
Here’s another example to consider: Shalini receives a cheque for Rs. 10,000 as a gift on her 20th birthday. Instead of spending this money or stashing it in her savings account, she invests in a 10-year fixed deposit that offers 8% interest per annum, compounded quarterly. By her 30th birthday, this FD will have more than doubled in value, earning over Rs. 12,000 in interest:
If the same amount had been invested five years later, Shalini would have earned less than Rs. 5,000 in interest by the time she turns 30. The only difference in these two scenarios is the amount of time her money has had to grow. This is just the tip of the iceberg.
Imagine what happens over two or three decades, with investments that offer even higher rates of return. So, the answer to the question ‘when should you invest?’ is NOW. Don’t wait any longer. Yesterday would have been better, but it’s never too late (or too early) to start investing. Put your money to work right away!
New Investor? Request a Callback.
Fill in your details and we will guide you at every step
other blogs
Lifestyle Money Hacks October 21, 2024
10 Best Ways To Make Money From Your Phone
Reality check time! What’s your screen time? Is it…. More than 4 hours per day? Well, don’t feel bad, the average is 6 hours 40 minutes. Now that you spend so much time on the black cuboid in your hand, isn’t it time to monetize it? In today’s digital age, figuring out how to earn … 10 Best Ways To Make Money From Your Phone
Money Hacks October 16, 2024
5 Effective Ways to Save Money
As women, we juggle many responsibilities, be it family, work, or personal goals. But often, one thing that slips through the cracks is saving money for ourselves & our future goals. Whether you’re managing household expenses, saving for your next big goal, or simply trying to build an emergency fund, saving doesn’t have to be … 5 Effective Ways to Save Money
Lifestyle Money Hacks October 4, 2024
Financial Wisdom from Maa Durga’s 9 Avatars During Navratri
Navratri, the nine-night Hindu festival dedicated to the worship of Goddess Durga and her nine avatars, is a time of spiritual reflection, cultural immersion, and joyous celebrations. While it’s known for its vibrant dances and colorful festivities, Navratri also offers valuable life lessons, including insights into financial matters. In this blog, we will delve deeper … Financial Wisdom from Maa Durga’s 9 Avatars During Navratri