Small Deeds

The beautiful thing about investing is that over time, small amounts of money can grow into  big sums. 

Many people put off investing because they think you need a lot of money—millions of rupees! — to start investing. This just isn’t true. Even if you are on a shoestring budget, you can still invest and build a decent sized corpus. The trick is that you stay consistent and start early. The amount of money is important, but is secondary to the act of investing, what's more important is to start as soon as possible.

Let's demonstrate this via an example. 

Suppose you are looking to build a corpus over a 15-year period for your child’s education. At today’s cost, if the education costs Rs 7 lakh, it will cost approximately Rs 16 lakh in 15 years (because of inflation). To reach that goal, you’d need to start investing Rs. 3200 per month for the next 15 years in order to fund your child's education. Now contrast this to the scenario in which you delay your investment decision by 5 years, in this case, you will have to invest at least Rs 7,000  per month for the next 10 years, almost double the monthly payment required in the previous scenario. Starting 5 years early essentially cuts your monthly payments in half.

Return Assumption: We have assumed that money invested grows at the rate of 12 % Annually.

Summary

  • You can start with a small sum
  • You have to be consistent
  • You have to start as soon as possible

It’s a good idea not to wait to start putting your money to work for you. Sure, investing has risks, but not investing is riskier for anyone who wants to fulfill their future goals and beat inflation. If you can get into the habit of saving and investing automatically during your 20’s, you’ll never have to worry about money or your future goals again.

There are plenty of ways to start investing with little money, with online and app-based platforms like finpocket, making it easier than ever. All you have to do is start. Once you do, it will get easier as time goes on, and your future self will love you for it.