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Is Disciplined Investing everything is it made out to be?

Making Compounding your Friend

Over the years of experience in the industry, we have observed that the small investments usually get neglected over the belief that, to start investing you need to have a large sum of money. Do you also think it is really worth saving small amounts? If your answer is yes then read on further to know how important it is to start saving and investing small amounts regularly. 

You believe investing a small sum regularly will not help you to meet your ambitious long-term goals. That is why many of you defer investments indefinitely. You will be surprised to know how small savings could benefit you in the long term. Let us take an example,

Consider two periods, your future saving scenario looks like this

Year The amount you will save per month
First 10 yrs Rs 2,000 for 3 yrs, then Rs 3,000 for 3 yrs, then Rs 5,000 for 4 yrs
Next 25 yrs Rs 10,000 per month

Given the above scenario, imagine two cases;

You Invest in first 10 years – Small savings done

You don’t invest for the first 10 years – No small savings done

So, if you invested small savings for 10 years you will have saved 7.2 lacs at least in the end. Well, that is a huge amount in case of any unforeseen events, this might come as big help. Also, this will give a nice feeling and boost confidence. To develop the habit of savings, starting at an early age by having monthly savings may sound easy but is easier said than done.

Starting to save early puts time on your side. The habit of saving is difficult to achieve, it requires discipline and a certain amount of sacrifice. When you learn to save small, it makes it easier to make future savings.

Small savings might not look big enough at the start, but over the period of time, they compound well and add to your wealth creation.

Let us see how the power of compounding helps money grow over a period of time. Your savings will add up and the longer your funds are working, the longer the power of compound interest will work in your favour.

Principal amount Interest Earned Returns after 25 years
Case I 35,49,713 1,00,58,943 1,36,08,656
Case II 30,00,000 65,73,666 95,73,666

Your investments after 25 years would be Rs. 1,36,08,656. Interesting! Isn’t it?

Case I- Where you had small savings compounded at a higher amount than Case II where you had no small savings. The above example tells us that if you don’t start saving small chunks of money just because you feel it will not be worth it, it’s not the right way of looking at it, because in the long term it will surely help in boosting the wealth you will create.

“A penny saved is worth more than a penny earned”. So do your future-self a favour and start Investing. Hopefully, you’ll never need to use it, but if you do, you’ll be beyond grateful it’s there. 

Start Small

It helps you in building the habit of saving!

Now that you know how important it is to start saving and investing no matter how small or large you invest, we will help you to have smart investments to provide financial security to your future self and your Family.

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