Why you must invest TODAY!

This is not an article on market timing! I am still not out clearly on whether we are in a bear market, bull market, recessionary market, growing market or emerging markets! This article is about why you must invest TODAY!
You must invest if you wish to have a corpus available for some life time event. Normally it could be buying a holiday, a car, a child’s education, or at least for your retirement. Retirement planning is the most neglected part of many people’s investment – because nobody sits on your head pushing you to do it. Now.So procrastination is the name of the game. You should realize that the most important thing in investment is not your money, it is time. Think of it like a Gym. The amount of money that you spend in a gym is perhaps very, very small compared to the amount of time that you invest in there – if you are serious. So is the case with successful investing. Surely it is not very easy to invest successfully. You’re putting your money at risk when you invest, after all. You can wind up with less than what you started with. You either do the investing yourself (with help from websites like www.myiris.com) (or pay a fund manager a nice sum of money) and keep track of them with products like (www.m3.myirisplus.com).The most important thing to realize is that the money that you are investing is coming out of present consumption foregone. Psychologically it might help you to think of postponed consumption – then it could be less painful!All that seems to work against the one true aim of investing: growing your nest egg now to have more money later. If you pick up a magazine like say Money Today (www.moneytoday.com) you will see 25 advertisements. The chances are 22 of them are urging you to spend, while 3 of the ads would be talking to you about some product like mutual fund or life insurance!Retirement solutions which HAVE to be custom made are nowhere spoken about in the paying media!

Why the urgency?

Albert Einstein called Compounding the 8th wonder of the world. You will soon see why he said so. The longer you have to invest and accumulate, the better off you are. It is as simple as that. Look at the table given below.Assume you’re looking to retire by age 60 with Rs.10 million socked away, and you think you can roughly get (say) 10% annualized return. These numbers show just how important time is to meeting your financial goals:

to Go
50 Rs.577.2 Rs.34,633.25
45 Rs.954 Rs.51,514.42
40 Rs.1581.3 Rs.75,900.37
35 Rs.2633.9 Rs.110,624.19
30 Rs.4423.8 Rs.159,257.65
25 Rs.7536.7 Rs.226,102.24
20 Rs.13,168.8 Rs.316,051.95
15 Rs.2,4127.2 Rs.434,289.21
10 Rs.4,8817.4 Rs.585,808.84
5 Rs.12,9137.1 Rs.774,822.68

If you thought coming up with Rs.954 a month to invest at age 25 was tough, just try waiting until age 50 and finding nearly fifty times as much spare cash in your budget. No matter how you slice it, the sooner you get started, the less painful it’ll be.

Start simple, but start now

Of course, deciding to invest for your retirement and actually doing something about it are two different things! With all the different investing options available to you, you may run the risk of “paralysis by analysis” — not doing anything at all for fear of making the wrong choice. Or you may watch some geniuses on television telling you when to start. You may happily procrastinate waiting for the market to correct – and perhaps miss out too much of the steep rise that is likely to happen when a market turns!The easiest way to get started is with a low-cost, market index fund like the Templeton Index Fund It’s a one-stop shop that gets you invested in companies representing a big portion of the Indian markets’ by capitalization.

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