Why should we start investing ASAP?

In financial world there is a terminology called "Time value of money" and the magic word "Compounding"

What does that mean?

That today's rupee that you have in hand is worth more than what you are going to get after two years.

Meaning?

We can invest what we have today and earn more returns than the money that we are going to get after x years.

So every amount that you invest today is going to fetch you more later.

Rs.1000 invested every month will fetch you more returns than the same amount that you are going to invest after a year.

For ex: Rs.1000 invested for a period of 2 years at a nominal interest of 12% will give you Rs.27065

But if you are going to delay by 6 months then the return is 19713 rs.

So every delay is going to give you less returns

Investing systematically

In those days even in our villages most of the women used to keep aside a certain amount of money every month or frequent intervals  in their rice boxes or hide it somewhere, where no one can reach.

They used to save so much, that when there is an emergency they used that money. Without expecting from their husbands.

My grand-mother did it. Another distant relative of ours saved almost 17 laks rupees and they found it out after she died.

They did not have any access to bank so they just kept it in their lockers at home.

But money will not multipy if you store in the cupboard. Of course you need to have some emergency cash at home. 

If you want good returns from your money then you have to invest.

A systematic investment plan will help you save and invest your money and also give good returns in the long run.

Different options to Invest?

You have multiple options to invest both for tax saving purposes and for investment purposes.

·         Provident Funds

·         National Public Scheme

·         Recurring Deposits

·         Fixed Deposits

·         Gold

·         Real Estate

·         Mutual funds

·         Insurance  and many more

But the key thing that you have to know is if there is a right asset allocation according to your goals.

We as financial planners will be able to guide you to invest correctly so that you meet your goals and dreams.

Why I need a retirement plan ASAP?

We all live in an era where we are forced to spend on material things. All E-commerce sites sell so many products at a lesser price. We are tempted to buy them. Never have we been presented with so many options that too at our door-step.

If we keep spending on unnecessary material things, then we lose our appetite to save for our future.

20 years back, a tender coconut that costed Rs.5 , now costs Rs.50. 10 X increase.

Can you believe with the inflation cost of approximately 7%, in another 20 years it might go upto Rs.500?

If you cannot believe what your current monthly expenses will cost you in another 20 years then go back 20 years and see what was the cost of the same items. It is a rude awakener for most of the people and most of them cant believe it too.

So its prudent to start your retirement plans asap even if you are at 22 years old. The sooner you start the more compounding affect and more retirement corpus for you.

Why Insurance is Important?

In India, we dont think seriously the importance of having an insurance.

Till  the necessity arises. When there is a health problem and we are in need of money we realize the importance of Insurance.

Recently my son's friend's father died in a bike accident. There was no insurance and practically the entire family is dependent on the son. And he has just started earning.
Imagine the burden that a 22 year old has to shoulder. Mother, brother, brother's marriage, his own marriage. The list goes on.

Why dont we realize the importance? Are we scared to think for death and plan accordingly.

Agreed there is a lot of negativity attached to it. But we live in an insecure world, and we are trying to secure certain things. 

An earning member has to have an adequate insurance policy for him, so that the family is safe atleast financially when his earnings is not there.


Many buy insurance, but you need to check if its adequate for your family. Most of us get insurance only for our Section 80(C) for tax purposes. 

If you dont take insurance at the right time or at the earliest, chances are there that you will be paying more premium.

Contact us to advice you on an adequate insurance plan to cover you and your family.

Why do I need a financial plan?

We always believe in going to the experts for everything. If we wish to tailor our dress we go to a Dressmaker, if we are sick we go to the doctor, if our tooth aches we go to a Dentist, but when it comes to managing finance we say we will do it.

“Its my money and I know how to manage it” J

This is a wrong move, unless you are really well-versed in finance.

Financial Planners are experts who deals with the personal finances of people. They know how to manage your goals by mapping all your goals to finances.

Leave the finance planning to them and they will be able to guide you better.

We will sit with you to understand your goals and chalk out a customized plan accordingly.

We don’t get off the shelf plans, each plan is carefully drafted so that you can live a financial free life.

Are we Specialists?

Most of us run at the very word Finance. I was also like that. I made a lot of mistakes in investments, paid hefty interests, due dates missed, you name it and I have gone through it.

Most of us have faced all these problems, or are still facing them.

What is the reason?

Lack of Finance Education. 

It took some 14 years for me to understand what went wrong.
If you are smart you will learn sooner. I am not asking you to get an MBA in Finance or pour hours over Finance subjects.

But is it not necessary to understand the basics?

• What is my salary?
• How much its taxed?
• Where are all the deductions going?
• Is my family protected?
• Do my earnings have the capacity to meet all my goals? (Forget desires for now)
• Do I have a retirement plan?
• Will I be able to lead the same life style that I am leading now after 25 years?

We assume that we are not earning enough and we keep running to earn more money. But the mistake we all do is not investing in the right instrument in the right time so that it meets our goals.

Even if we delay our finance planning and investing by one month, the effect is too much on our returns. Why?

Because there is something called 'Time value of money"

Money cannot double in a day. It needs time to compound. That is earn interest on interest. And this takes a long time.

We will cover more in subsequent blogs, as there is no end to Financial education.