Compounding is the 8 th wonder – No No No, Albert Einstein never said these words. He was a wise man 🙂 to say such a statement
I say – Compounding is the FIRST wonder in Investing
I did share some months ago, on how to build wealth just by saving & investing every month in a disciplined, consistent & sustaining way.
Sharing an illustration with the numbers, for your reference.
Monthly Savings & Investments – ₹ 10,000/- , to start with…
Starting Age – 25 yrs
End of contributions – 65 yrs
Hike in contributions every year – ₹ 10,000/- per year – but only for the first 10 years
Year 1 – 10k a month SIP
Year 2 – 20k a month (add one new 10k SIP)
Year 3 – 30k a month (add one more new 10k SIP)
This way….by the 10 th year it’ll be a – 1.2 L a month SIP (s)
No more hike in the SIP contributions thereafter, but just keep continuing all the existing SIP s untill age 65 yrs (1.2 L a month)
The end corpus @ 8%, 10%, 12%, 15% & 18% is shown in the illustration
this is how sustainable, stealth lego wealth gets created
Every other penny earned by an individual beyond these contributions can be invested elsewhere into other assets / asset classes
But, this is the pizza base to start with for every mid tween adult who starts to earn 😀
The more the delay, the lesser is the compounding
No amount of earning from one’s profession can beat an early start compounding from investing wisely
Build your Lego Wealth Architecture