Many people thought investment can be started once they will have a few lakh of rupees in their bank account.
In this email, I am going to share the power of small investments. Before that let me tell you a story.
Once a king challenged a sage for a chess game and promised for a prize of sage's choice if he could win.
After a long chess game, the sage beat the king.
Then it was time for prize
The sage was very good in mathematics and asked for one rice grain with a condition as his prize.
The condition was to place the grain in the first chess square and double it on every consequent one.
Being a man of his words, the king ordered his granary to fulfill the sage's demand.
1st square - 1 grain
2nd square - 2 grains
3rd square - 4 grains
4th square - 8 grains
5th square - 16 grains
6th square - 32 grains
7th square - 64 grains
8th square - 128 grains
9th square - 256 grains
10th square - 512 grains
..
20th square - 524,288 grains
..
30th square - 536,870,912 grains
..
After placing grain in starting squares, the king had to put about 1,000,000,000 rice grains in the 40th square.
The king realized that he would not be able to fulfill his promise.
Because if he kept continuing, In the last square, the king would have had to put more than 18,446,744,070,000,000,000 rice grains which is equal to about 210 billion tons and is sufficient to cover whole Indian territory with a one-meter thick layer of rice grains.
The king gave all his wealth to the sage for not being able to fulfill his promise.
Started from 1 grain and ends at a number which is even hard to calculate. This became possible due to the power of compounding.
So it doesn't matter with the amount you start investment, but if you are consistent, then you will definitely reach your goals.
Even start with a small investment of Rs 1000 per month. This will help you to
- Get discipline in investment
- Create a corpus with the power of compounding.
A monthly investment of even Rs 1000 will bring a habit of first investing before spending. The amount is not big enough but the investment habit is what decides the financial success or failure.
You can start investing in bank RD, PPF, or mutual fund SIP and gradually increase the amount based on your earnings.
Suppose you are investing Rs 3000 every monthly in mutual funds through SIP with an expected return of 12% (assuming your are 25 now)
At the age of 55, you will have a corpus of more than Rs 1 crore by just investing Rs 3000 every month.
You can increase the return by investing directly in stocks.
If you want to learn about stock investment then you can read my article on 7 steps to start stock investment.
I would like to sum up the email with "Don't wait for a big amount to start investing, this may never happen.
Start investing with a small amount from today and see the results in the future.
Pardeep Goyal
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