In order to secure the future financially, it is important to invest as soon as the earnings start. The delay in savings will have the same effect on the financial situation at the time of retirement.
- Last Updated:November 19, 2020, 9:36 AM IST
For example, we take three investors. These three investors have started investing Rs 5,000 every month at different ages. All these investors are investing for their retirement till the age of 58 years.
>> Investor ‘A’ started investing at the age of 23. On an investment of Rs 5,000 every month, they expect an average return of 11 per cent. By the age of 58, they will have Rs 2.64 crore as retirement fund.>> Investor ‘B’ has started investing Rs 5,000 every month since the age of 28 years. They too are expecting 11 per cent return. By the age of 58, they will have Rs 1.40 crore as retirement fund.
>> Investor ‘C’ starts investing at the age of 33. They are also expected to get 11 per cent return on investment of Rs 5,000 every month. Accordingly, at the age of 58, investor ‘C’ will get only 79 lakh rupees as a retirement fund.
The above example clearly shows that for an annual return of 11 per cent, an investment of Rs 5,000 every month can generate up to Rs 1 crore in 5 years. If you look at the gap of 10 years, then this amount is getting even bigger. After this example, it can be said that the sooner the investment is started, the more financially strong your future will be.