• JUNE 24, 2010

You haven't started investing as yet?

Life's a journey, not a destination. And so is investing. We study hard and work hard, so that we have ample money to save and invest for our future. But then there are many of us who just save, and never think of investing those savings. Some wait for the 'right time' to start investing. And then there are others who wait to save the 'right amount' of money before they start investing. But then, as you know, investing is a journey, not a destination. And the sooner you get on to this journey, the better it is for you.

See the graph below. The annual return you require on your investments to reach a stated target increases as you grow older. Assume you start with Rs 250,000 investment when you are 25 years old. You can accumulate Rs 10 m when you turn 50 at an annual return of just 16%. But if you start with this amount (Rs 250,000) when you turn 30, your annual return has to be 20% to reach the Rs 10 m target by age 50. The target annual return shoots to 45% if you start at age 40!

So, what are you waiting for before starting to invest in stockmarkets?

If you are waiting for the 'right time', it is now!

Yes, we mean it! India is staring at years of strong economic growth and bull market. There is huge amount of domestic savings that is still to come to the stockmarkets. Just as a statistic, just around 4-5% of Indian households' financial savings are invested in equities. And this will definitely increase as the economy grows stronger and people see a rise in their disposable income and therefore risk taking capabilities.

So, if you catch the tide early, you can enjoy your ride up over the next 5 to 10 years.

Anyways, if you are waiting for the 'right amount' of money to start investing, you do not need to wait after all! Start small, and keep adding to your investments on a regular basis.

By investing the money slowly and steadily, you are able to better ensure you have money for your later years. And just because your later years are far away doesn't mean you should wait to invest. The best investments are the ones that take time to pay off.

So, what are you waiting for? If you haven't started investing as yet, start now!

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