Hi friends,
I thought of writing something which can be of help to all my friends across the globe, so I am sharing an idea with you based on the experience I have gathered from financial industry.
It is very important for each one of us to develop the “HABIT OF SAVING”.
These 3 magical words “HABIT OF SAVING” should carry a lot of weight, but I have a strong belief that these 3 words are missing from the lives of majority of the people, please make a note that habit is something which cannot be missed, which is mandatory, which has to be there under all circumstances, that is the reason I have chosen this word “HABIT”.
A lot of us must be saving something from our earnings but I think that we are not following this exercise religiously, like we use to pay the rent of our home or the EMIs of our car, EMIs of our home loan, bills of credit cards etc.
These 3 magical words “HABIT OF SAVING” are of utter importance in our lives because “MONEY SAVED TODAY IS THE MONEY EARNED TOMORROW”.
Now from here on we will go by an example:
Mark, a gentleman aged 30 is working in an organization and is drawing monthly salary of Rs. 25000 & is likely to retire at 60 years of age, we all are aware of the fact that an individual’s worth keeps on increasing throughout his professional life & it depends primarily on the experience he gains & how well he is keeping up with the pace of industry he is in.
Coming back to Mark, here in our example we will not apply the increase in salary Mark will get throughout his life & let’s see how much money he will be able to accumulate by his retirement if he saves only 10% of his monthly salary which is Rs. 2500 & invests this amount in some very safe & conservative investment yielding only 8% yearly returns compounded monthly.
Mark saved & invested a total of Rs. 900,000 over 30 years & will be having a sizeable corpus of more than Rs. 3,750,000 at the time of his retirement.
 |
I hope by now, after going through this example each one of you must be having a very good idea how important these 3 words “HABIT OF SAVING” are and how much will be your corpus when you reach retirement, magnitude of your sum will depend primarily on the kind of savings you can do on monthly basis & the amount of returns you are getting from your investments & yes the most important thing is to keep into consideration the hike in salary as well while calculating.
The early you start, the better it is because in later years power of compounding adds magic & then money grows exponentially, those who have yet not started, there is no need to worry but to start saving from the very next paycheck you will get, as a very common road sign says, “It is always better late than never”.
Most important of all is to imbibe those 3 words in your soul---“HABIT OF SAVING”, once you have it in your blood you will be a rich man at retirement.
In next post we will discuss what all are the investment options available to maximize the returns & the kind of investment products one should have in his portfolio.
