Cost of delay investment decision

Cost of delay investment

Have you think ever what cost you pay for your delay decision for investment? I know many youngsters and people between 25 to 30 age group who has just star the job but clueless for the investment. They are too confused where they should invest. The worst fact majority of them are not serious for investment. They find it boring when you discuss with them about saving and investment.

They often ignore the most powerful concept the time-value of money about wealth building. In my opinion, everyone needs to understand this powerful concept. The famous physics scientist Albert Einstein had admitted that the most powerful force in the universe is power of compounding interest. According to this concept that even a small amount and insignificant amount of the money actually grow to an amount if left it to be invested for a long period.

My friends, believe me you pay a huge cost for delay decision for investment. Let me take an example for better understanding.

Example of delay investment decision:

Mr A is planning to accumulate wealth for retirement. His retirement age is 60 and currently he is 30 year old. He has decided to invest some money on monthly basis in an equity mutual fund till his retirement and expect return 15%.

• If he start invest at present Rs 5,000 every month and invest till his retirement he will accumulate huge corpus of 2.82 crore approx.

• If he delays the decision of investment 10 year means he start investing at age of 40 year and even if he invest Rs 10,000 every month till retirement. The accumulated corpus would be 1.33 crore approx at the time of retirement.

• And now the worst case if he start invest at the age of 50 means he delays the investment decision 20 year and invest every month Rs 30,000 till his retirement but accumulate only just Rs 79 lakh approx.

You can easily see in above example that even if you increase your investment amount but if you delay in investment, you pay huge price for delay or in other words you will accumulate less amount even after investment of large amount.

For more detail and any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com