Power of Investing Early

Power of Investing Early

Let me tell you a story by which you would understand what's the power of investing early means exactly.

Ram and Sham work together in the same company, both of them were getting approximately the same salary every month, Ram when turned 25 thought to start investing for a comfortable retirement whereas Sham thought that retirement is a long time from now, will plan for it once he turns 35.

So, Ram has started investing in Rs. 15000 per month at the age of 25 and kept on investing until he turned 35, whereas Sham started investing Rs. 15000 per month at the age of 35 and continued to invest until he turned 60.

What do think who played smartly here?

Let me break things down for easier calculation.

In this example interest rate is considered as 12% annually and compounding frequency is monthly. 

Ram's Retirement Planning 

Sham's Retirement Planning

I think by now you must have understood the power of early investing, saw how Ram planned his retirement smartly. Did you know that Albert Einstein reportedly said “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it."

If you also want to do the same keep reading my blog, I will be sharing a lot more on investing in different asset object.