INVESTMENT IS A TOOL
Imagine Katrina and Neha compete against each other to become
rich!
Katrina:
Started investing INR 50,000 every year from the age of 20 until the
age of 28 at 12% return
Neha:
Started investing INR 50,000 every year from the age of 28 all the
way until the age of 65 at 12% return
Who
do you think is richer?
At
the age of 65 here are the results:
Katrina:
INR 4.9 Crores
Neha:
INR 3.1 Crores
Katrina invested only INR 4.5 lakhs and that too only for 9 years. Poor Neha invested a whopping INR 19 lakh for 38 freaking years.
These numbers sound mind boggling because our brains cannot fathom the effects of power in mathematics. Compounding formula is A = P (1 + r)^n where A is final amount, P is current amount, r is returns and n is time. As you can see, time is the parameter which has the most impact since it’s a power.
But most of us IDIOTs still chase returns and higher salary because we start late But you’re not most of them.
, that’s why it’s called the present..png)
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