Do you really want to spend $6,00,000 for a dinner ?
You know every $50 spent today will result in losing $600,000 in a century ? Yes, a few dollars spent today will result into forgoing thousands of dollars in future because they couldn’t compound. The way that numbers exploded as they grew at a constant rate over time was how a small sum could turn into a fortune. This is power of compounding.
Power of compounding
Sachin Tendulkar started playing cricket at the age of 16. At 29, he has already amassed over 12,000 runs in one-day matches. On the other hand, Michael Hussey started career at age of 30. The idea is simple: the earlier you start investing, the more likely it is that you would end up making more money. While runs scored in cricket don’t multiply automatically, investment does!
let’s under stand with simple example if we put money in Nifty index now at Rs 11,500 and assuming it grows at nominal rate of 7% PA then amount at the end of the year 2099 would be INR 23,00,000.
Develop habit of investments/savings
It is not necessary to be rich for developing habit of savings. The most effective saving habit is known as “pay yourself first.”
Pay yourself first means to set aside a predetermined amount of money for saving every time you are paid before using any of that money for spending. It is easy paying yourself first! A good place to begin is to think of savings as a fixed expense (just like rent – it can’t be adjusted or ignored) and add it to your spending plan as an expense.
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