Let us do a simple math:
If you start saving Rs 5000 per month when when you are 30, earning nominal 8% per year. After 20 years, when you are 50 years old, this is what you will end up with around Rs 30 Lac.
But if you start doing the same at age of 20, you will end up with Rs 75 Lac when you are 50.
This difference is huge. This is magic of compounding. No wonder, Albert Einstein coined compound interest as 8th wonder in the world.
“Compound interest is the eighth wonder in the world. He who understands it, earns it…. he who doesnt…. pays it!”
Starting compounding your money as early as possible is one of the wisest decisions you can take in your life. In simple words, you start earning interest on the interest you have earned so far – so it creates a positive feedback loop.
“Compound interest occurs when the interest that accrues to an amount of money in turn accrues interest itself. It’s the deceivingly simple force that causes wealth to rapidly snowball.”
Start compounding today. Best time to start was 10 years back. Next best start is NOW!