Investment Tips: You can create a fund of Rs 1 crore by investing Rs 1 lakh..

As important as the amount you invest is, it is equally important how long you invest. The power of compounding works only when you stay invested for a long time. The return on your investment gets added to the principal, giving more returns every year. In this way, compounding multiplies your investment in the long term. (Investment tips)

A 2 to 3-year FD will make you rich; these banks are giving the highest interest

Benefits of starting to invest early-

This can be easily understood with an example. Suppose you invest one lakh rupees, on which you will get a 12 percent return annually. You give this money a chance to grow; do not withdraw even a single rupee from it. At what age you invest this, a big difference will be seen.

More profit on investing at the age of 20-

If you invest Rs 1 lakh at the age of 20, then by the age of 60, in 40 years, this amount can reach Rs 1 crore – that is, almost 100 times your initial investment. This happens because your money keeps growing rapidly every year, which also gives interest on interest.

Less profit on investing at the age of 30-

Now, let us assume that you made this investment 10 years later, i.e., at the age of 30. So by the time you turn 60, this money will be only 30 times. This means that your investment of Rs 1 lakh will become Rs 30 lakh. By starting to invest just 10 years late, you lost the opportunity to earn a wealth of Rs 70 lakh.

Very little profit on investing at the age of 40-

Now we see what happens when you start investing at the age of 40. If you start investing at the age of 40, your investment gets only 20 years to grow. Then your investment of Rs 1 lakh grows only 10 times, that is, it becomes only Rs 10 lakh. This return is not bad, but it is much less than the return you get by investing at the age of 20.

It is not the time of investment, but the period of investment that is important-

The above example shows that in investment it is not important when you invest, but it is important how soon you start investing. The magic of compounding works only when the investment gets a long time to grow. In the initial years, your money grows slowly. But later, especially in the end, it grows very fast. The reason for this is compounding.

Compounding works only when the investment is for a long time-

This means that the younger you start investing, the bigger the corpus you will be able to build by retirement. Even if you start investing a small amount at the age of 20-22, you can build a large corpus thanks to the magic of compounding and discipline-patience. Remember, a small investment today, like Rs 1 lakh, can become Rs 1 crore or even more in the future.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.