Most of us want to become one, but ‘believe’ that crorepatis are born and not made. Wrong!
As Noel Whittaker (a well known Australian money columnist) put it: “Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do….it is a matter of managing your money properly”.
Some people believe that ‘they’ cannot make money. Wrong again! Money can be made by anyone and everyone. All it requires is planning and discipline. Any investor who takes care of these factors is bound to make money in the long term. There’s nothing like a quick buck. If you made it, consider yourself lucky and not skilful.
The legendary investment guru, Warren Buffet (his net worth in 2008 is USD 62 billion or Rs 2,48,000 crore) has said: “Time spent IN, is more important than TIMING the market”.
The more time you give your money to grow the more it will grow. In other words, the younger you start investing, the more money you will have at your retirement. Each year delayed would mean a loss in earnings. Let us look at an actual example:
Investment: Rs 5,000 per month up to age 60
Expected Return: 7% per annum
Notice how the ‘cost’ of a 10-year delay is HALF the amount.
The chart above clearly indicates that the best time to invest is NOW! More so, when markets are down and the long-term picture looks encouraging. Every day, every month, every year that you delay is an opportunity lost. And the loser is no one else but you!
To conclude, as Mary Kay Ash (a business woman and author of three best-selling books) says: “Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve.”
As Noel Whittaker (a well known Australian money columnist) put it: “Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do….it is a matter of managing your money properly”.
Some people believe that ‘they’ cannot make money. Wrong again! Money can be made by anyone and everyone. All it requires is planning and discipline. Any investor who takes care of these factors is bound to make money in the long term. There’s nothing like a quick buck. If you made it, consider yourself lucky and not skilful.
The legendary investment guru, Warren Buffet (his net worth in 2008 is USD 62 billion or Rs 2,48,000 crore) has said: “Time spent IN, is more important than TIMING the market”.
The more time you give your money to grow the more it will grow. In other words, the younger you start investing, the more money you will have at your retirement. Each year delayed would mean a loss in earnings. Let us look at an actual example:
Investment: Rs 5,000 per month up to age 60
Expected Return: 7% per annum
Notice how the ‘cost’ of a 10-year delay is HALF the amount.
The chart above clearly indicates that the best time to invest is NOW! More so, when markets are down and the long-term picture looks encouraging. Every day, every month, every year that you delay is an opportunity lost. And the loser is no one else but you!
To conclude, as Mary Kay Ash (a business woman and author of three best-selling books) says: “Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve.”
5 comments:
All that is fine. But how does one beat inflation? Not long ago, being a lakhpati was a big deal. Today, a lakh means nothing. And tomorrow, a crore may mean peanuts. Financial planning should be able to beat inflation. What are your views?
Beating inflation is the whole essence and motive of Financial planning which of course only a few can achieve and they are the ones known as successfully rich and prices and inflation are issues below them. As you (MJ)say that invest early and now. But when markets were in the 16000 levels 'now' would have been disastrous for those investors !!! Again it is nevertheless all still a gamble but yes, for those who want to invest, markets are low ,so put in the money now as henceforth over the years the only way markets can go from here is UP !!!
All the best
sundeep
Vidya, you are perfectly correct. The value or the purchasing power of money does come down with time. Inflation is the biggest 'silent killer' of any investment. The idea behind this blog is to create an initial awareness of how planning and discipline can help create a corpus. One of the main focus areas in financial planning is to ensure that the corpus that we are creating is growing at a faster pace than inflation. I will discuss inflation and its effects in a later blog.
Sundeep, there are a few things that you have missed. Firstly, financial planning is not a one-time affair. It is an ongoing process till the time the goal or objective is achieved. Hence, looking for ‘right’ levels to invest is not financial planning. That is in a sense ‘gambling’ (fishing for ‘the’ bottom and trying to make a quick buck on the way up). In volatile markets, the best way to invest is through SIPs (systematic investment plans) or monthly installments. One cannot predict the behavior of the markets in the short term, hence it is vital that you look at the ‘big picture’.
Most of us, whether we admit it or not, are afflicted by the "khabar" syndrome. We do not wish to be perceived by anyone as having " missed the bus". the only way a person can guarantee success is lots of research, open mind, willingness to accept mistakes and the biggest thing-- control on the greed factor. Sandeep said something abt investment being disastrous at the 16000 levels. I am not quite sure that that is the case. It is not very tough to beat inflation. What is tough is the ability to keep eyes and ears open to the facts and not get carried away by " Khabars". I for one would keep investing in the markets in what MJ says.. in a disciplined and systematic way !!!!!!
Post a Comment