No. This article is not about how Ram started saving when he was 21 and Ravan started saving at the age of 34. Then go on to say how Ram saved much less for a lesser period, and still has more money than Ravan.

I am saying much simpler things. Ask anybody who is above 50 years of age – what is one regret in their savings/ investment journey – and they are likely to say ‘not starting early enough’.

It is easy to understand the causes of delay. Your parents were not too well off, so you spent on furnishing the house. Then you bought a motorcycle for yourself and a car for your parents (still paying EMIs). You married your school sweetheart and so it was an early marriage. You were only 25 when you got married.

You have no kids but you are paying the housing EMI, car EMI, taking the load of household expenses. Your younger unmarried brother is staying with you and not contributing much towards the household expenses. Your dad has 5 months to go for retirement, but not much is expected as ‘retirement package’ from the builder where he is working…

Sure all these sound genuine, but old age is screaming for cash, NOT excuses why you started late.

Now search your soul and tell me that you REALLY, REALLY could not have started 4 years before with Rs. 500? or say 5000 or Rs. 25,000?  – see what suits you. I AM SURE YOU COULD HAVE STARTED 5 YEARS ago…and by now increased the monthly amount to 10x – x being the starting point amount. I have seen people doing this…

So go MAKE A START….then RAISE THE AMOUNT…..and DO NOT INTERRUPT….you will see the benefits. And for some people I am sure it will be beyond their lifestyles. I know of 3 people who started a SIP with their first salary. One was an editor of a finance website..and is now abroad …has stopped it. Other 2 are continuing…and are thrilled with the result – achieved over the past .

In 2019 I might turn to one of you for examples!!

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  1. Again simple article but the punch line is awesome! Start early or now with small amount but keep continuing.

    It is perfect example of my own story. I should have started in 1999 when I am actually doing but unfortunately didn’t do because on fear & unknown territory by ignorance, in spite of being educated (calling myself!). Started in 2003 continued till 2005 massive IRR about 56% (without LTCG tax)and fear caught & redeemed about 95% without a need.

    Started in 2007 but continuing.

    To put a perspective added further 2/3 of additional investment including redemption in 2005. Grown amount now should have been achieved by my initial amount itself. Stop and Go have hurt.

    However it is learning and though to share. Nothing to vent as having decent IRR% being invested and hope to catch in 2019!

    Been a follower of Subra and nurtured me well. Thanks Subra!

  2. “In 2019 I might turn to one of you for examples!!” – looking forward for your calculations.
    – great lines….
    thank you Subra ji,

  3. I started earning in 1991 but stayed away from equity till 2003. Developed fear and risk aversion to equity due to the various scams like Harshad Mehta, ketan mehta et all at that time

    I have been investing regularly in mutual fund SIPs since 2003 and the portfolio looks decent today but on hindsight there is a regret that I started equity investing 10 years late. I wish I had come across Subra, Pattu and jagoinvestor at that time….but I guess better late than never….

  4. Financial literacy starts at home, problem as Subra mentioned in some of his earlier posts are that parents don’t talk about money with their children.
    Compounding is something that should be explained to every new kid who starts earning, rather than that LIC’s and EMIs are pushed thru.

  5. lot of indians have financially stupid parents. most of them when starting to work send money home or save for other obligations forced by parents.

    by the time they come out of all that it is natural to get car house and do things for themselves. i dont find anything wrong in that

  6. It is difficult to make people around you understand.
    They just listen n go on with buying or continue with the money back policies or such sundry products.
    Unfortunately compounding is best forgotten after leaving school.

  7. Hello Sir,

    I out of college from 2012 and am in a job for last 1 year 3 month.
    My salary until last month was 20000pm.
    My house rent is 4000pm.
    I spend another 8000pm on other expense (food, transport, cloth etc.)
    I spend around 6000 every 3 month visiting parents.
    I put 1000pm in EPF and just started PPF last month with 500pm.
    I have 30000 in NSC.
    I have Rs 60000 in Savings Account.

    Recently my salary was increased from 20000 to 26000(I got job confirmation).

    Please suggest where should I invest additional money.
    I am not looking for high risk investment.


  8. Thanks for the nice article on compounding and I can tell u , I have been doing sip in Mutual funds since 2009 though late in my life but decided and started with Rs 5000/- pm and slowly increased 15000/- pm and so on and now for more than one year it’s gone to Rs. 50000/- per month , just to mention I am NRI ,but now I am returning back to India, so how can i still continue investing without stopping sips as I was NRI all these years my sips every month was going through NRE account and now will have to change the bank account to residence account .So do I need to reedem all my funds and reinvest ?there I would be loosing the compounding effect .May be subra sir can advise on this ?
    And by the way just for info of the readers here I have almost invested 20 lakhs in sips and have present value approx 32 lakhs .so compounding actually works wonders though my investment period was only 5 years .so hope readers start today with whatever small amount you have and it’s very easy to start with .Do you know it starts with as small as Rs. 500/-per month . Go to cams office and they will do all for you I did it sitting outside India, so you can imagine how easy it is .

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