Basic knowledge about compounding

                      For an  investor, need time and discipline to invest in the amount. To become rich quickly, there is no magic formula. By making the best investment anyone can make  money . When you cut your cost of living and save and invest every rupee , we see that every rupees increases its value. Every small amount we invest, when we look at the long-term will turn into huge  sums . Today we will get some knowledge about investing.

       When we start investing, the first thing to do is to manage all unnecessary expenses. Take the leftover from it. There will be a lot of unnecessary costs in the society, we live in today . In today’s society ,we tend to buy the unwanted items and replace them after one or two days of use.

Spended for this would be very large sums. You should try to save the money, you spend. It is of no use to have a keeping the cash in your hand or simply put it in a savings bank account. After a while, even if you put it in a savings bank account ,there is  little difference.

      But we can’t build a great wealth from this money. The only way we can grow is we have found good ways to invest and we can only grow. Manage our unnecessary expenses. Buy only the essentials. Enjoy what you need in life. When we spend every  rupee we have to think that, if we invest that rupees we will become a billionaire.

 Start an investment of soon as possible.

             Often we will be ready to invest .But  we have made excuses, it’s just a waste of time to invest. Don’t waste money and  time.

         If you have one rupee, you should start investing right now. As of late, the investment is the long-term will be worthless.

For  example :    If we invest Rs 10,000 per month at 7% interest for the next 30 years, we get over Rs 1 crore after 30 years.

        The amount we have invested in this is only Rs 36 lakh. The remaining 85 lakh is a return from this.

         if you have not invested in this  same deposit for 15 years and start investing after 15 years, you  invest Rs 10,000 per month cannot enough to achieve this Rs 1 crore.   At the rate of Rs 10,000 you will have to pay around Rs 31,000 a month. You will understand the need to start investing as soon as possible from these examples .

     For example  : If you invest Rs 10,000 a month for 5 years ,you get about Rs 738395 after 5 years. Of this, Rs 6 lakh is the amount invested . The return is only Rs 1,38,000 . When we invest 30 years instead of 5 years, the return we get  around Rs 85 lakh .When we invest Rs 10,000 amount for 5 years at 7% interest instead of 30 years ,we get only Rs 1,38,000.

       Look at the difference in the return we received. Invest in long-term . Only then we can create a good wealth.  Don’t waste small sums.

     After collecting 1 Rupee, if you invest Rs 30 a month at 7 % annual interest, for the next 30 years . The  value of each rupee deposited after 30 years will be Rs 36,386 . You invested only about Rs 16,800. The return is about Rs 25,000. If  you invest a good amount ,you can earn a great amount after 30 years .

  • Invest as early as possible . Start an investment with a small amount. Increase the amount of investment as we grow.
  • Start investment with small amount . It is foolish to think that ,after getting a large amount of money ,can start an investment.
  • Keep investing continuously, when you getting money ,re-invest without making an investment stop.

                  This compounding is one thing that helps us grow wealth through investment. 

L                 If you invest 1 lakh rupees at 7 %  annual interest for 30 years. After 30 years  you will get only 7,61,000. If you invest Rs 1lakh  every year for 30 years at 7 % interest instead of investing 1 lakh at one time ,you will get Rs 1 crore in 30 years.

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