Invest in early age: Experts advise investors that one should start investing in the market as soon as possible.
Invest in Early Age: It is important for a serviceman to do such financial planning during his job that he does not have to stress money on retirement. But many times he is delayed for starting the investment. Be it veteran investors or market experts, this advice to investors is that one should start investing in the market as soon as possible. Apart from this, they advise investors to make a long-term view of their investment. Compounding benefits from starting the investment early and maintaining it for a long time. Compounding power can increase your investment many times. It can be easily understood with examples.
One can explain this with an example. Suppose someone started Nivea at the age of 25, then someone in 35 years and someone in 40 years. Everyone has retained their investment till the age of 60. Here we understand from the case study of all three. Investments have been made in such instruments in all three cases, where the estimated annualized return is 8 percent.
On starting investment from the age of 25
Monthly investment: Rs 5 thousand
Estimated Return: 8% per annum
Investment Period: 35 years
Your total investment: Rs 21 lakh
Total value of investment: Rs 1.2 crore
Benefit: Rs 94.5 lakh
On starting investment from the age of 35
Monthly investment: Rs 5 thousand
Estimated Return: 8% per annum
Investment Period: 25 years
Your total investment: Rs 15 lakh
Total value of SIP: Rs 48 lakhs
Benefit: Rs 33 lakh
Starting investment from the age of 40
Monthly investment: Rs 5 thousand
Estimated Return: 8% per annum
Investment Period: 20 years
Your total investment: 12 lakh rupees
Total value of SIP: Rs 30 lakhs
Advantage: 18 Lakh Rupees
How much profit
During the 35 years, where the total fund is being prepared 1.2 crores on the investment of 21 lakhs, there will be a profit of 94.5 lakh rupees on the investment. Your investment here has increased by 450 percent.
The total value on investment of 15 lakhs during 25 years will be Rs 48 lakhs and the total benefit on investment will be Rs 33 lakhs. Your investment here has increased by 220 percent.
During 20 years, the SIP value on an investment of 12 lakhs will be Rs 30 lakhs and the total benefit on investment will be Rs 18 lakhs. Your investment here has increased by 150 percent.
Best Investment Options
Equity and debt mutual funds, PPF, government bonds, national pension system, fixed deposits. Here mutual funds are getting 8 to 10 percent returns in the long term, then 6 to 8 percent annual return is possible in NPS. At present interest in PPF is 7.1% per annum, 7 to 8% returns can be achieved on government bonds. At the same time, FD is getting 7.25 percent annual return from 5.25 percent. Here some options have 5 years or 15 years maturity period, but can be extended for another 5-5 years.
Zero Coupon Bonds: Zero Coupon Bonds issue at a discount, investors get fixed returns
What is compounding
It can be understood directly that it is compounding to reinvest your earnings on investment. In this, you get interest on the principal as well as its interest. Compounding is a great way to increase your investment. If you also want to take advantage of this, then investing in mutual funds through SIP is a better option.
Source: www.financialexpress.com
