By Admin 
Mutual Fund SIP: Young people often postpone investment after getting a job. They feel that they have their whole life ahead of them, so in the beginning people prefer to travel a little, buy a new bike, a new phone or spend on things of their choice.
However, in the world of investment, not only the amount matters, but time is also very important. Many times a delay of just 5 years in starting investment makes a difference of crores of rupees till retirement.
What is the difference between starting SIP at the age of 25 and 30?
Suppose a young man gets his first job at the age of 25. His salary is Rs 40,000 per month and he can comfortably do SIP of Rs 10,000 every month. At that time, he neither has any home loan nor any big responsibility of the family. Despite this, many people postpone investment and think that they will start after the salary increases.
When the same person turns 30, the picture has changed. The salary may increase to around Rs 1 lakh per month, but the responsibilities of marriage, home, children and future also increase. Then they realize that just a good salary is not enough, but investment is also necessary. In this way, he starts a SIP of Rs 10,000 every month, but by then he has lost 5 years of precious time.
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How much is the loss caused by a delay of 5 years?
If both investors do SIP of Rs 10,000 every month and get an average annual return of 12%, then a person who starts SIP at the age of 25 can create a corpus of around Rs 5.5 crore by the time of retirement at the age of 60.
At the same time, an investor starting at the age of 30 will be able to create a fund of only about Rs 3.08 crore. The surprising thing is that there is a difference of only Rs 6 lakh in the total investment of both, but at the time of retirement there is a difference of about Rs 2.42 crore in the fund.
Why does this happen?
The reason for this big difference is compounding. Compounding means that the returns you get on your investment also start earning returns in the future. The more time one gets to invest, the faster the money grows.
The first investment of Rs 10,000 made at the age of 25 has the opportunity to grow for 35 years, whereas an investment started at the age of 30 can grow only for 30 years. This extra 5 years makes a difference of crores of rupees in the long run.
Lessons for young investors
- Don’t wait for a big salary to start investing.
- It is beneficial to start early even with a small amount.
- Time is the greatest partner of investment.
- You can create a big fund in SIP in the long run.
This is why for many people, just 5 years between 25 and 30 can make the difference between a corpus of Rs 3 crore and Rs 5.5 crore at the time of retirement.
IIT Gold Medalist leaving his job worth Rs 3 crore and running a grocery store, you will salute Vivek after hearing the reason