Power of Compounding and Early Investing to Get Rich

Power of Compounding and Early Investing To Get Rich

Many people ask me that, Which is the best investment advise that you would like to give the start-up investors? Well, it is the – Start Early.

Well, Yes. Starting early is the 95% investment advise that anyone needs. This is because the investment is not only the game of money but it is the game of money and time both.

This is because of the power of compound interest. The compound interest is the greatest force in the universe according to the Albert Einstein.

The more time you invest, the more your money will grow and the more rich you will become. Over the time, the compound interest increases in the geometric proportion and making you very rich.

Read the Articles on The Power of Compound Interest

The Compound interest is so powerful that over the time it multiplies your money in a breath taking manner. The simple interest increases in the linear proportion but the compound interest increases in the geometric proportion and make you extremely rich over the time.

But to make the compound interest work in favour of you, you will have to start investing as early as possible in your life probably in your early twenties or even before.

What most of the people argue is that, they will earn a lots of money later on in their lives but well this is not the truth. The truth is that, even if you invest very small amount of money early in your life in the asset which gives you returns higher than the inflation, than over the time your this small amount of money will multiply like hell.

The people who are rich today have either acquired their fortune from their past generations or started investing very early in their life. Starting your own business is also a form of investment of your time and money both. The earlier you will start the more your business will grow in its valuations over the period of time and make you rich.

All the Self-made first generation billionaires have started building their businesses very early in their lives probably in their teen age or in early twenties and that’s why they are extremely rich today.

So Understand the power of compounding and start investing as early as possible in your life means now.

Get Rich by Saving

Get Rich by Start Saving in your 20s

Many of you may never heard the miracles of the compound interest. The Compound interest so powerful over the time that, it multiplies your wealth in a breath taking manner over the time. Now, if you are in your twenties and want to get rich in your life than the only thing you have to do is – Start investing early.

Here is the real time example.

Consider this scenario: If you begin saving for retirement at 25, putting away $2,000 a year for just 40 years, you'll have around $560,000, assuming earnings grow at 8% annually. Now, let's say you wait until you're 35 to start saving. You put away the same $2,000 a year, but for three decades instead, and earnings grow at 8% a year. When you're 65 you'll wind up with around $245,000 -- less than half the money.

You can see in the above example that only 10 years of difference in investing makes a huge difference in wealth later on. This is because of the compound interest. If you never start investing, you will never become rich and financially free.

And if you someday really want to get rich in your life than you should start investing as early as possible in your life probably in your twenties. Warren Buffet is the second richest person in the world and he started investing in the stock market when he was just 13. Today he is 80 and he has accumulated tremendous wealth only by investing his money.

Many people have a false belief that, to become rich, they need to build a fortune or do some large scale ventures in their life. But this is a Myth.

To Become rich in your life, you need to do one simple thing in your life and that is – Start Savings & Investing Early.

Yes, This is the 95% advise that anyone needs for his/her financial success and rest of the advises amount for only 5% for getting rich. So if you are in your twenties than it’s the best time to start investing.

Start Investing Now

Start Investing Now

My several friends ask me one common question every time - “When Should I Start Investing?”. My Simple and the best answer to all such kind of questions is - “Start Investing Now”.

But most of them don’t understand the deep meaning behind my this statement. Again after few months, they ask me the same question – when should I start Investing? I again reply that Start Investing Now. In fact, anybody anytime ask me this question, my answer is the same.

Many of my friends get frustrated by this answer and tell me that, Every time you give us the same advise again and again. Tell something new. Tell something about when is the right time to invest in the Stock market? When is the right time to start investing for a newbie?

Unfortunately, my answer to all of the above questions is the same – Start Investing Now.

Because NOW is the right time of Investing. I am saying this because this is the advise that amounts for 95% of your Investment success. The reason is the Compound interest. The Compound interest is so powerful over the time that, it multiplies your wealth in a breath taking manner. But for that, you have to invest for the long long time. You have to make time work for you via compound interest than and only it will work for you.

No matter how the market conditions today is. but the right time of investing is still now. There is an old saying that,

“The Best Time to Start Investing was 20 Years before & The Second Best Time is NOW.”

Thus, this much is the importance of starting early. If you can start investing today than don’t wait for tomorrow because the lost money can be recovered but the lost time can never be recovered.

Start Investing Early

Start Investing Early

Many people ask me that, Which is the single most effective advise that you would like to give the people who want to start the Investment for their Financial Future? Well, my single most effective advise is – Start as Early as Possible means Now…!!!

Believe me…This is the 95% advise that anyone needs to succeed in the game of Investment. One of the reason why Warren Buffet is world’s most successful Investor is because he started investing when he was 13. Today he is 80. Nobody else in this world has ever started investing this much early in the history of mankind and that’s why he is the richest investor today.

Now, you will ask me that, What is the reason behind this? Well, the reason is – The Compound Interest. According to Albert Einstein, The Compound interest is the greatest force in the Universe. If worked on your wealth, it can multiply your wealth in a breath taking manner. The Compound interest grows exponentially over the time unlike the simple interest which grows in the linear proportion.

Only 5 years of difference can make a huge difference in your wealth later on. Say for Example, you start investing at the age of 25 and your friend starts investing at the age of 30 than at the age of 65, your wealth will be more than double than your friend even if both of you have earned the same amount of money whole of your life. This is because you have started investing 5 years early than your friend and this 5 years will make a huge difference in the wealth later on because of the compound interest.

So Start Investing early rather than earning a lot in the later life.

How To Multiply Money?

How To Multiply Money?

This is a very basic question. But many people don’t know the basics of multiplying money. I will explain you in this article that how you can multiply your money?

Well, See First of all understand that, To multiply your money, you need money. I mean only money clones money. In other words, to make money from money, You have to make your money work for you harder rather than you work hard for the money.

Now, Making your money work for you means Investments. Investment is a game of making your money work for you.

In short, if you want to multiply your money than you have to do Investments. The answer of this question is Investment. Now, the question comes that What is Investment and How it multiplies our money?

Well, Investment means the process of acquiring anything which puts money into your pocket (Assets). I mean, acquiring assets out of your money is known as Investment.

The Examples of Assets are Stocks, Bonds, Gold, Real Estate, Mutual Funds, Businesses, Art, Coins, Stamps, Antiques, Intellectual Properties, Websites, Blogs, Forums or anything else which puts money into your pocket.

If you want to multiply your money than you need to find out those things which tend to appreciate. Than and only your money will grow and multiply.

The Compound Interest is the another factor that is important to multiply your money. According to Einstein, Compound Interest is the greatest force in the Universe.

Compound Interest over the time multiplies your money in a breath taking manner and make you extremely rich. But for that, You have to hold any asset for very long time horizon. Than and only compound interest work in favour of you more and multiply your money like anything.

Investment is the only game in this world which can make money out of money and that’s why I advise you to start Investing as early as possible in your life means NOW…!!!

Compound Interest Billionaires

The Compound Interest Billionaires

According to Albert Einstein, The Compound Interest is the greatest force in the Universe. Because of the Compound Interest, Wealth is concentrated in the fewer hands, the rich get richer and poor get poorer because of the compound interest.

All of the Billionaires become billionaires because of the compound interest only. Over the years, the compound interest has worked on their wealth and multiply their wealth in a breath taking manner.

Remember, The Compound Interest is like a double-edged sword. When you Invest your money, It starts working in favour of you and when you Borrow Money, It starts working in favour against you. Billionaires become so much wealthy because they have keep investing in their own Businesses over the years and thus the compound interest has worked a lot on their wealth.

All the Billionaires become ultra-rich because of the compound interest only. If you also want to become an ultra-rich, the only thing you have to do is, You have to make compound interest work in favour of you for years.

And you can make the compound interest work in favour of you by acquiring Assets, converting something into assets or simply creating Assets (Businesses, Websites, Blogs, Books, Movies, Music).

So Start focusing on creating or acquiring more assets in your life. Believe me, The Compound Interest will start working in favour of you once you acquire assets…!!!

Cost of Becoming a Doctor

What is the Cost of Becoming a Doctor?

Well, I am not talking about the total expense for becoming a doctor. I am talking about How much total financial loss you can suffer just because you start investing 10 years later than other people in your life.

As all of you know that, a doctor can’t start earning before the age of 30 years. This is because of the long medical school life span of 10 years. Now, Have you ever think that, How much wealth loss it will cost to you if you become a doctor?

I am not talking about the educational expenses. I am talking about the loss of wealth because you start 10 years late than other people.

Well, let me explain you this by one example. Say for Example, You are in a medical school and one of your friend is not in the medical school. Now, your friend starts his own Internet Business (Or any other Business) at the age of 22 years. You just start earning 10 years late means at the age of 32 years because you think that by becoming a doctor and taking a speciality degree you will earn more.

But well, Doctors are High Income but low accumulator of wealth group of people. A Doctor can earn high but can not accumulate more wealth. And there are several reasons for that.

- During the first few years of life he/she has to pay those higher educational loans. Once he repay all of his high educational loans, he will be around 37 years old if he had started making money at the age of 30 years. Another thing is that, a doctor has to live high status life style and that’s why his expenses will be also high. So he will accumulate less.

Now, just think that, your friend has started building wealth at the age of 22 years and you start building wealth at the age of 37 years. And if you are a regular reader of this blog than you know that, How Powerful the Compound Interest is? Your Friend who has started his own Internet Business at the age of 22 years will surely retire or semi-retire at the age of 37 years when you really start accumulating wealth. Yes, The Compound Interest is this much powers. It has direct relation with time. If you want to know the power of compound interest than simply go to the “Compound Interest” Category of this Blog. You will realize that, how powerful the compound interest is.

Thus, there is a huge financial cost of becoming a doctor.

Compound Interest Products

Compound Interest Products

The Compound Interest is the greatest force in the Universe according to Albert Einstein. Compound interest is everywhere and it’s like a double edged sword. Means when it works in favour of you (When you Invest your Money), it can make you rich and ultra-rich but when it works against you (When you Borrow Money), it can make you poor or even bankrupt.

Many people ask me that, Which are the various Compound Interest Products available in the Financial Market?

Well, Let me tell you the fact about the compound interest. The Compound Interest is every where. In fact, The Simple Interest is a theoretical concept only. In the real life, only compound interest exists.

So No matter which Financial product you buy, The Compound Interest is everywhere in all kind of financial products so don’t worry and buy any of the financial product. The compound interest will work for you.

Compound Interest is in Stocks, Bonds, Gold, Real Estate, Mutual Funds, ULIPs Savings Accounts, Pension Plans, Businesses, Art, Rare Items, Coins, Stamps, Vintage Cars, Internet Businesses, Online Assets, Blogs, Forums, Websites, Credit Cards, Car Loans, Personal Loans, Mortgages, Intellectual Properties and anything else in the world which is Asset.

So whatever you chose, the compound interest is there. You can not separate the compound interest from any of the above products. It is the in build element in anything that is related to money. So from now onwards, don’t try to find compound interest products in the market because it is everywhere.

Just focus your mind and efforts in buying valuable assets. That’s it. And the compound interest will start working for you…!!!

How to Invest now to Get 50,000 after 5 Years?

Mr.Avinash aged 40 year needs Rs.50,000 after 5 years, if the interest rate is 10% per Annum compounding, How much Should he invest now to get Rs.50,000 at the end of 5 years?

Well, this is a simple question. But many people don’t know that, how to achieve this goal. I mean many people don’t know that how to get Rs.50,000 after 5 years at the rate of interest 10% per annum compounded annually or half-yearly.

Well, you can achieve this goal by 2 methods.

01) Lump-sum Investing Method -

You just invest Rs.30,000 today in the Investment vehicle that gives you 10% compounded annual return and your money will become Rs.50,000 after the end of 5 years.

But well, if you need 50,000 at the end of 5 years than probably you don’t have 30,000 today to invest right? So let’s go to the another method.

02) This method is Recurring Deposit Method -

Here you invest regular amount of money every month, quarterly or half-yearly and at the end of the 5 years you get 50,000.

I have run the Compound interest calculator and according to the calculator, if you want to make 50,000 after 5 years at 10% interest rate, you need to invest Rs.6000 every year for next 5 years to get 50,000 at the end of 5 years.

How to Make a Crore?

How to Make a Crore?

Well, See the above Video. Here I am not talking about the ways to make 10 Crore per Day by forging Documents like Asharam Bapu as shown in the above Video. But here I am talking about some legitimate ways of making a crore. By the end of this article, you will know that How to make a Crore?

Well, there are several ways to make a crore in your life. I will divide all of these ways into broadly 4 groups. All the ways of making one crore fall under any one of the following 4 broad categories. In short, this short guide will teach you all the possible ways of making a Crore in your life. You can later on choose that, which way is best suitable to you.

01) Be an Employee and Make a Crore -

Well, the first and most common way of making a crore is, you become an employee on higher post in the government or at some large corporation. Say for Example CEO or General Manager level. And at that level, it is possible to make a crore in your life. Because Large corporations pay very well salary to you that you can easily make a crore from your career. However, to get such a high post, you will have to work very hard and also you will require the years of experience in that Industry.

02) Be a Self-Employee/Professional and Make a Crore -

The above YouTube Video is about the great big deals worth of crores in Bollywood Industry. How Bollywood stars are making crores by signing a contracts or a big deals.

Another way of making a crore rupees is that, You become a self-employee and start providing some professional services. You can choose from wide variety of professions such as Doctors, Lawyers, Chartered Accountants, Cricketer, Golf Player, Singer, Actor, Artist, Musician or anything else. If you give outstanding results, you will definitely make a crore from these professions.

There is a huge demand for these professions in the world. And there is a lots of money in these professions. However, you have to be outstanding in these professions to make this much money.

03) Be a Business-Owner and make a Crore -

Well, This is my one of the favourite way of making a crore. Here you develop a Business out of Scratch. In other words, you become an Entrepreneur and later on make a crore from growing that Business to such a level that, from that level it makes crores of rupees for you or you simply sell whole of your fortune (Business) to the new buyer and make a crore by selling your business.

I know several people around this world who develop successful businesses and later on sell it for the profit to the new buyer. In fact, Internet Entrepreneurs do the same thing. They flip Website Businesses for higher profit. Or they choose to hold their online Business and make a crore from their Online Business.

Weather it is online or offline Business, it is possible to make a crore from the Businesses.

04) Be an Investor and make a Crore -

The above YouTube Video is about Warren Buffet – The richest Investor in the world. See in the Video that how Warren Buffet has made crores and billions in his life by investing money.

Well, This is my most favourite way to make a crore. Here your money works for you and make more money for you. Take the example of Warren Buffet. He is the Investor and his money works for him and generate more money for him.

Investment means making money out of money. It is one of the way to make a crore. In fact, here you have to do mind work and not the physical work unlike any of the above ways. Once you invest your money, it will start working for you for the rest of your life and generate more money for you even you don’t work anymore. This is the most exciting way of making a crore.

Here the Compound interest works for you. If you have invested Rs.20,000 per month in the last decade (2000-2009), than today your 24 lakhs would have been a crore in the Indian Stock Market. This is the power of compounding and making money from money. Investors make money like this.

So now, you choose that, from which way you want to make a crore. I Personally like to make a crore by third and fourth way means by owning a Business or by doing Investments. What’s your favourite way to make a crore?

Investing at the Age of 15

Teen Investing: Investing at the age of 15: How to Get Rich at Young Age?

Well, recently a regular teen age reader of this blog asked me that, What is your opinion about Investing at the age of 15?

Well, Investing at the age of 15 means you are in your 10th Standard right? Well, I think this is the right age to start investing. Because if you ask Warren Buffet than he will tell you that, You are too late if you start investing by the age of 15 because he had started investing at the age of 13 and he still thinks that he was late, he could have start investing early and than he was more richer than Today….!!!!

This is because the more you start investing early, the more rich you will become. Because the Compound interest will work more in favour of you to make you rich over the time. If you start investing at the age of 15 years than your other friends will start investing at the age of 30 probably and than they will be too late. Because there is a gap of 15 years of investing between you and your friends and thus they will never take over the level of your wealth.

Remember, according to Albert Einstein, The Compound interest is the greatest force in the world. Once you invest your money, the compound interest will start working in favour of you and once you borrow money, the compound interest will start working against you to make you poor.

So I think there is nothing wrong in investing at this much early age.

Now, the main hurdle in starting investing this much early is – Your Parents.

I have observed that, it is very difficult to convince the parents. Let me give you my Example. Well, I have not started investing at the age of 15 years but When I had started investing at the age of 25 years, my parents were angry with me. They started thinking that their son is becoming a money minded and he won’t concentrate on study. Instead he should concentrate behind his higher educational degrees.

So I can assume that, you will be in the same situation as mine. But after a lots of arguments and explanations, I somehow managed to convince my parents and thus they gave me permission to start investing at the age of 25 years.

But well, I know that I am 5 years late. Because I could have started investing at least 5 years earlier than this.

So Start Investing at the age of 15 years if your parents support you. There is nothing wrong in it…!!!

Investing in Early Twenties

Investing in Early Twenties makes a Huge Difference in the Wealth Later on…!!!

When it comes to retirement planning, most of the people think that, What’s hurry? I am in my 30s or 40s right now and there are still more years to retire so why to start investing early? But well, this is not true. One should start planning retirement from the day they start earning means in early twenties.

Most of the people in the world start making money in their twenties, few people start making money since their early twenties. So according to me, they should start investing in their early twenties.

Do you know that, Warren Buffet – The Legendary Investor had started investing when he was just 13 years old? And today he thinks that he was Late…!!!

Starting early is this much important. If you never save and invest your money, it will never work for you and the compound interest will never work in favour of you to make you rich. The more early you start, the more wealth you will accumulate over the time. People who are rich today have typically started regular savings and investing very early in their lives probably since their early twenties and that’s why the compound interest had worked more on their wealth to make them richer over the time.

Unfortunately, today’s youth prefers to spend all of the money they earn. Savings and Investing is the last priority. People go to their workplace to earn money and every month they receive a paycheck. And they pay all of their bills first and spend all of the money and they think that, if something will remain at the end of month, they will invest that money. But nothing remains at the end of the month for savings and investing.

While Rich people first invest their money from their monthly income. Every month when they receive a paycheck or any other form of Income, they first of all invest 15-20% of that money in the long term investments such as Stocks, bonds, gold, mutual funds or private businesses and they spend rest of the money behind their monthly household expenses.

This is known as “Pay Yourself First” Strategy.

So the Key of become very rich is – Start Investing in your Early Twenties…!!!!

Invest at Young Age and Be Rich

Invest at Young age to Be rich and retire Early

When it comes to investing, most of the people will say that, “What’s Hurry? I am just 35 and there is still a lot of time to retire.”

But well, let me tell you that, Warren Buffet – The Legendary Investor, also known as The Oracle of Omaha once said that, “I had started investing when I was 13 and today I think that I was Late”.

Starting Early in the game of investing, getting rich and building serious wealth is this much important. This is because of the power of the compound interest. If you see the compound interest curve on the graph paper than the compound interest progresses in Geometric manner over the time and grows your wealth exponentially over the time. But The Compound interest will work in favour of you in such a wild manner only if you have started investing early.

Only a 5 years of difference in starting investment (Say you have started investing at the age of 30 while someone else has started investing at the age of 25) can make a huge difference in the wealth over the time.

If you want to be rich, financially free and retire early than you MUST have to start investing as early as possible means – NOW…!!!! This is because,

The Best time to start investing was 20 years before while the second Best Time is Now. So Start Investing Right Now….!!!!

People who are rich and financially free today have typically started investing since their early years of earning life means probably in their twenties. Sometimes early twenties. While High Income earning people who are still working until their 60s have not accumulated enough wealth to retire because they had started investing late.

So Start investing Now…. And go on to the path of becoming rich…!!!!

Understand the Power of Compounding

The Power of Compound Interest: Understand the Power of Compounding

The following is a great post from Mr.Prakash P. Joshi. I am very thankful to him for his great effort behind creating this article. You can contact him on ppj_2001@yahoo.com

If, a good habit is developed at the early age of Life i.e. on the verge of completion of education and starting of some earnings say, at the age of twenty (20) and keep regularly investing only Rs. 1000/- {Rupees One Thousand only} p.m.  by way of SIP in a most passive manner, by putting money in say SENSEX based Index Mutual Fund (having least tracking error) the “Returns” will be phenomenal by the passage of time. Historically, since the inception in the year 1979 till the current year 2009 [time frame of 30 years] the average annualized ‘returns’ on BSE Sensex is about 18.67% even if we discount these figures and assume an average, moderate ‘returns’ projections @ little less than 15% p.a. one can arrive at an impressive amount . To quote an example Rs.100/-   (Rupees One Hundred only) grows to Rs. 1,00,000/- (Rupees One Lakh only) after 50 Years @ the annually cumulative ROI of 14.82%. It is further assumed that the person will keep investing regularly and religiously and reap the benefits of “Power of Compounding” which works & holds good better and better by the passage of TIME.

From the above one will understand and agree that none of the Insurance Scheme product like Endowment / ULIP, Pension Scheme etc... With unreasonably fat commission to the Agents, Administrative Charges under various heads cuts your corners (read- pocket) nicely. Further, the remaining amount after deducting essential ‘mortality’ charges gets invested with ‘returns’ LESS than the double digit figure. All this is presented in a most attractive flashy way! Are you going to be the victim? To overcome this always, go only for “Pure Term Insurance” {without return of premiums} with large Sum Assured vis-à-vis cheapest yearly premium and never mix up concept of ‘Saving’ & ‘Investment’ with Life Insurance for heaven’s sake. Even, it is advisable & wise to get out of the mess, by making your existing Endowment / ULIP / Pension Scheme Life Insurance policies convertible in to “Paid Up” status at the earliest, but do not “Surrender” them for sizable loss.

Please convey the above message to your young, dear and near ones for their future benefit. 

How to Make 1 Crore by Investing for 20 Years?

How to Make 1 Crore by Investing for 20 Years?

You can make 1 Crore rupees by investing for 20 years. The Best part is the Compound interest here. Means the compound interest is so powerful over the time that it will multiply your wealth in a breathtaking manner over the time so you will have to invest very less amount every year to archive the 1 crore wealth after 20 years by investing.

I have run the compound interest calculator on the spread sheet. And according to the calculator, if you invest Rs.50,000 per year for 20 years in the Indian Stock market than it will become Rs.1.10 Crore after 20 years.

Now, 20% annual return from the Indian Stock market is realistic expectation in the long run. So it means that over the 20 years of span, you are investing Rs.10 Lakhs in the Equity and after 20 years, it will become over Rs.1 Crore.

Isn’t it amazing?

You are investing just 10 lakhs in the stock market but over the time compound interest will work in favour of you and multiply your wealth in a breathtaking way. The Compound interest is amazing. Even a small amount invested over the long time will become a huge corpus.

According to Albert Einstein, The Compound interest is the greatest force in the universe.

Compound interest works on everything on this world. Whenever you borrow money, it will work against you and whenever you invest your money, it will work in favour of you to make richer. People around this world who are rich today have understand the power of compound interest since their early years of life and that’s why they had started early and that’s why they are rich today.

Basic Principles of Wealth

Which are the Basic Principles of Wealth?

Do you know that, Wealth follows certain rules. Wealth follows certain principles. And anyone who follows these principles can become wealthy over the time. In other words, Wealth is blind. Wealth does not see that, weather its owner has higher educational degrees or not? Wealth has nothing to do with Higher educational degrees.

Here are some Basic Principles of Wealth. If you follow these principles than you can also become wealthy. There is not way that, if you follow these basic principles of wealth and can’t become wealthy.

01) Make your Money Work for You (Investing) -

The first and the most important principle of preserving and growing your wealth is, make your money work for you rather than you work hard for the money. I am talking about Investing. Investing means making your money work for you.

Do you know that, your money has the same potential just like you to work in the economy and generate more money? Wealth will always be preserved and grow who continue investing money.

02) Start Early -

If you want to become wealthy and stay wealthy for generations to come than, you should start investing as early as possible in your life means now. This is because to make the Compound interest work in favour of you. It will take a Time to make compound interest work on your wealth to grow it exponentially.

Person who has started investing at the age of 25 years will accumulate much more than the person who has started at the age of 30 years.

03) Invest Minimum 15% of your pre-tax income every year -

If you want to live on your wealth than you must have to re-invest at least 15% of your annualized pre-tax income every year in acquiring assets. This is because to constantly grow your asset column so that, it throws passive income for the rest of the years to come.

04) Spend Less than you Earn, Live Below your Means -

This is also a great timeless advise to preserve wealth. Most of the people in this world fail to become wealthy because they spend more than they earn. They use Credit cards, borrow money to fuel their high status life style. And that’s why they fail to accumulate serious wealth. If you want to build some serious wealth than you have to spend less than you earn, than and only you can divert the rest of your money towards long term investments.

05) Never Force your Money for un-natural returns -

Wealth will flee away from the person who force it to make unrealistic returns. Wealth will only preserve and grow if you find a profitable investment for it. If you force your money for un natural returns, it will fly away from you.

Thus, those who have followed the above 5 basic principles of wealth will become and stay wealthy forever. And those who violate the above principles of wealth will never ever become wealthy.

Recurring Deposit Accounts - Basics

Recurring Deposit Accounts are the ideal way of investing small amount regularly for a period of desired time. And over the time, the compound interest will work in favour of you and you will have a large accumulated corpus at the end.

Recurring deposit provides an opportunity to plan specific financial goals such as daughter’s marriage or children’s education.

There are basically 2 types of Recurring Deposits Accounts available in India

01) Post Office Recurring Deposit Account &

02) Bank Recurring Deposit Account

Post office RD accounts are available at wide network of post offices all over India while all the Banks offer RD Account opening facility.

The Best part about Recurring Deposits accounts is that, you can invest as low as Rs.500 per month in these account. And over a period of time, say for 5 years or 10 years, you will have a descent corpus for your various financial goals. RD Accounts are for savers.

The Compound interest is so powerful over the time that, it multiples your wealth in a breath taking manner over the time. Thus, if you really want to start saving but at the end of month, there is nothing left for saving than RD Accounts are for you.

You have to follow “Pay Yourself First” Rule. Means every month, when you receive a paycheck, some amount of money should go towards your Recurring deposit account. Believe me,… This is very hard to follow initially but after few months, you will become disciplined and regular saver.

Is it Best Time to Buy the Contra Fund?

Is Now the Best Time to Buy the SBI Magnum Contra Fund?

I really don’t know that why people ask such types of questions? What is the logic behind asking such types of questions? I have separately make the article having such kind of title because many readers have asked me the same question several times.

Now, let me tell you the 2 proverbs.

- It’s not about Timing the market but It’s time in the Market…!!!

- The Best Time of Investment was 20 Years Before & The Second Best Time is Now…!!!

Do you understand the meaning behind both of the above proverbs? Well, they show the importance of time and the power of compound interest in Investing. The Investment is not only a game of Money. But it’s a game of Money & Time both.

So you MUST have to invest your time also along with your money. Now if you try to time the market than you will loss that valuable time also. Instead of that why not start SIP in SBI Magnum Contra Fund right now?

Another thing is that, you should not try to time the mutual funds. The common mistake many people do is, They try to time the mutual funds. They treat Mutual Fund units as a stocks. But well, Mutual Funds are not the same as that of stocks. But each mutual fund has an underlying portfolio of 30-100 stocks.

And the fund manager of any mutual fund will time the market for you. He won’t invest your money in the stock market until he finds the attractive valuations. Last years (2008) most of the mutual funds were sitting on the huge cash pile. Most of the fund had as high as 40% in Cash and Liquid Assets. Because the market was highly volatile at that time.

So In my opinion, you should not try to time the market as well as Mutual funds….!!!

1 Crore After 20 Years

I want 1 Crore after 20 years, So How much Should I have to Invest Today?

Let us today discuss that, how to decide the investment amount for the long term financial goals? In our example, the reader wants a corpus of Rs.1 Crore after 20 years. So How much he should invest every year to build a corpus of 1 Crore after 20 Years?

I have run the compound interest on the spreadsheet. And according to the compound interest calculator, if you want to build a corpus of 1 Crore after 20 years than you should invest Rs.50,000 per year for 20 years at the rate of 20% per Annum return.

Now, Indian Equity has given 15-20% Compounded annual return in the long run. So what you can do is, you can start regular SIP in 2-3 Equity Diversified Mutual Funds. And Invest at least 50,000 per annum. After 20 years, it will definitely be worth of Rs.1 Crore or even more.

Now let us assume the conservative rate of return. If we consider the return from Indian Equity 15% compounded annually in the long run than according to the compound interest calculator, than you have to invest Rs.85,000 per year in equity for 20 years.

In conclusion, if you want to build the corpus of 1 Crore after 20 years than you should regularly invest Rs.50,000-85,000 per year in the Indian Stock Market assuming that the rate of return from Indian Equity is 15-20% Compounded Annually…!!!

So Start Investing Now…!!!

How to Make 1 Crore in 10 Years?

How to Make 1 Crore Rupees in 10 Years?

First of all, Is it possible to make 1 crore rupees in 10 Years? And if yes than How?…. Well, It’s 100% possible to make Rs.1 Crore in 10 Years. With the knowledge of Compound interest and a little bit of self-discipline, anyone can make this much amount of money in 10 years only.

Well, see.. Making 1 crore rupees in 10 years is possible by Investing only. Now, let us assume 3 scenarios. we will consider 8%, 15% and 20% compounded annual return in various asset classes and count that how much money you have to invest every year in each of the asset class.

Our first Asset Class is Bonds/Fixed Deposits. We will consider 8% per annum return. Now, according to the compound interest calculator, you will need to invest Rs.6 Lakhs per year in Bonds or Fixed deposits to make Rs.1 Crore after 10 years.

Our Second and third asset class is Equity. Considering that the Indian Equity in the long run can give you 15-20% Annual return. Now, after running the compound interest calculator, You have to invest Rs.4.5 Lakhs per annum in equity or Rs.3 Lakhs per annum in equity assuming the rate of return 15% and 20% annually.

Thus, if you invest in Equity than you need to invest half the amount as that of Bonds to make Rs.10 Crores in 10 years.

Now, Let us think differently. Let us discuss some exotic way of making 1 crore in 10 years. And that way is, You develop a Successful Business, grow its customers, revenue and later on after 10 years, sell your business for much much more than Rs.1 Crore.

Many Internet Entrepreneurs around this world have done this in just 5 years. It takes only 5 years to develop a successful website business and later on you can sell it for millions also.

So there are several ways of making this much amount of money. But the easiest 2 ways are Investments & Business…!!!