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When To Invest


What Is Right Time To Invest ?

What is good time ?

bad time .... is good !!

A simple question ....?

Question : What you do when product is cheap?

Answer : You Buy More ...

So, invest more when your money can buy more.

but, 90% people do reverse.

and rest 2% are RICH GUYS...

So, when does this bad-good time comes ?

How to identify ?

You have three options:

1) Manage Time and follow ups-downs of economic policies and reforms.

2) Invest in Mutual Fund Portfolio Management System and leave it to us.

3) Opt for monthly SIP and invest in disciplined way >>see here

 

When To Start Investing ?

Start investing now. Right now. EARLY YOU START, MORE YOU WILL REAP.

This cannot be stressed that enough. Anyone you talk to about their retirement fund or their investments will tell you, “I wish I had started earlier.” If you start investing your money today, I guarantee you it will change your life.

BENEFIT OF STARTING EARLY

Starting Early
Consider two individuals, we'll name them MOHAN and SHYAM. Both Mohan and Shyam are the same age.

When Mohan was 25 he invested Rs.15,000 at an interest rate of 5.5%. For simplicity, let's assume the interest rate was compounded annually. By the time Mohan reaches 50, he will have Rs.57,200.89 (Rs.15,000 x [1.055^25]) in his bank account.

mohan's friend, Shyam, did not start investing until he reached age 35. At that time, he invested Rs.15,000 at the same interest rate of 5.5% compounded annually. By the time Shyam reaches age 50, he will have Rs.33,487.15 (Rs.15,000 x [1.055^15]) in his bank account.

What happened? Both Mohan and Shyam are 50 years old, but Mohan has Rs.23,713.74 (Rs.57,200.89 - Rs.33,487.15) more in his savings account than Shyam, even though he invested the same amount of money!

By giving his investment more time to grow, Mohan earned a total of Rs.42,200.89 in interest and Shyam earned only Rs. 18,487.15.

So bottom line is there is NO STANDARD AGE FOR INVESTING, but EARLY you begin more you will accumulate.

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The power of compound interest

 

Compound interest supercharges your savings because you earn interest on the interest you earn as well as the money you deposit. The longer you leave your money, the more powerful the compound interest effect.

The earlier you start, the more you make

The longer you leave your money, the more powerful the compound interest effect. So the earlier you start saving, the more you will make from compound interest (but only if you don’t withdraw the interest).

The same applies to other investments such as shares, where you regularly reinvest dividends, or the company reinvests its profits.

Compound interest also applies to debt – but not in a good way. The longer you leave a debt which charges interest, the bigger the debt becomes.

Compound interest in action

Tip: Start saving just Rs.10 a week when you’re 20 and by the time you’re 40 you could have saved over Rs.13,000.

This table shows the power of compound interest in action. We've based the results on an interest rate of 2.5% after tax and allowing for inflation.

We've also assumed that you will increase the amount you save each week to account for inflation. So if inflation is 2% this year, you will increase your weekly savings by 2% from next year (from Rs.50 to Rs.51).

Look at the first five years and the last five years of the table. In the first five years you save Rs.2,600 and earn Rs.170 in interest. In the last five years, you’re still saving only Rs.2,600, but earn a massive Rs.3,970 in interest - far more than you save. That's the power of compound interest!

Saving Rs.10 a week from the age of 20

Start saving Rs.10 a week when you're 20 and by the time you're the age in the left hand column you'll have saved the amount in the right hand column.

AgeCapitalInterestTotal
25 Rs.2,600 Rs.170 Rs.2,770
30 Rs.5,200 Rs.700 Rs.5,900
35 Rs.7,800 Rs.1,640 Rs.9,440
40 Rs.10,400 Rs.3.050 Rs.13,450
45 Rs.13,000 Rs.4.980 Rs.17,980
50 Rs.15,600 Rs.7,510 Rs.23,110
55 Rs.18,200 Rs.10,710 Rs.28,910
60 Rs.20,800 Rs.14,680 Rs.35,480

 

 

 

 

 

 

 

  *rounded to the nearest Rs.10

The Rule of 72

There’s an easy rule you can use to work out how your savings or investments can grow with compound interest.

Just divide the interest rate (or average annual return) into 72. The result tells you how long it will take for your money to double without further savings.

For example, you have Rs.10,000 that is earning 6% interest (after tax). 72 divided by 6 = 12.

Every 12 years your Rs.10,000 will double, so:

  • After 12 years you have Rs.20,000
  • After 24 years you have Rs.40,000
  • After 36 years you have Rs.80,000

To be completely accurate, you would need to reduce the interest rate to allow for inflation. For example, if you allowed for 2% inflation, the real interest rate would be 4%.

When To Invest