{"id":17,"date":"2015-09-30T03:31:25","date_gmt":"2015-09-30T03:31:25","guid":{"rendered":"https:\/\/kuverablog.wordpress.com\/?p=10"},"modified":"2019-06-10T09:33:22","modified_gmt":"2019-06-10T09:33:22","slug":"001-start-investing-today-a-ka-the-power-of-compounding","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/001-start-investing-today-a-ka-the-power-of-compounding\/","title":{"rendered":"Start investing today a.ka. the power of compounding"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d538b625286\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d538b625286\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/001-start-investing-today-a-ka-the-power-of-compounding\/#The_golden_rule_of_investing_is_the_sooner_you_start_investing_the_better_your_long_term_outcome_is_going_to_be\" title=\"The golden rule of investing is, the sooner you start investing the better your long term outcome is going to be.\">The golden rule of investing is, the sooner you start investing the better your long term outcome is going to be.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/001-start-investing-today-a-ka-the-power-of-compounding\/#Woa_big_difference_Rani_ends_up_with_Rs456lacs_one_smart_girl_Ram_with_Rs374lacs_not_bad_for_a_lazy_dude_and_Shyam_with_Rs174lacs\" title=\"Woa, big difference. Rani ends up with Rs45.6lacs (one smart girl), Ram with Rs37.4lacs (not bad for a lazy dude) and Shyam with Rs17.4lacs.\">Woa, big difference. Rani ends up with Rs45.6lacs (one smart girl), Ram with Rs37.4lacs (not bad for a lazy dude) and Shyam with Rs17.4lacs.<\/a><\/li><\/ul><\/nav><\/div>\n<h4><span class=\"ez-toc-section\" id=\"The_golden_rule_of_investing_is_the_sooner_you_start_investing_the_better_your_long_term_outcome_is_going_to_be\"><\/span>The golden rule of investing is, the sooner you start investing the better your long term outcome is going to be.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><em> Invest early, invest often and invest for the long term. Just be sure that you are investing money that you wouldn\u2019t need in the short term.<\/em><\/p>\n<p>Let\u2019s look at an example.<\/p>\n<p>Rani invests Rs2,500 every month in stock market through mutual funds.<\/p>\n<p>Ram is always confused on where to invest. There are so many fund choices, and every expert on TV is touting a different investment as the road to riches. He does what most of us will do in a situation like this, he procrastinates his decision. As money starts piling up in his bank account he gets anxious and he invests Rs60,000 (Rs2,500*24) every 2 years in the stock market through mutual funds.<\/p>\n<p>Shyam doesn\u2019t believe in the equity market. His 2,500\/ month stay in the bank and earn him nominal interest of say 6%.<\/p>\n<p>They all start in 1990 and for simplicity they only buy a NIFTY mutual fund. Let\u2019s see how they would have done in the past 25 years.<\/p>\n<p><a href=\"https:\/\/blog.kuvera.in\/wp-content\/uploads\/2015\/09\/001-jpg.png\"><img loading=\"lazy\" class=\"aligncenter wp-image-8\" src=\"https:\/\/blog.kuvera.in\/wp-content\/uploads\/2015\/09\/001-jpg.png?w=300\" alt=\"Power of compounding\" width=\"751\" height=\"447\" \/><\/a><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Woa_big_difference_Rani_ends_up_with_Rs456lacs_one_smart_girl_Ram_with_Rs374lacs_not_bad_for_a_lazy_dude_and_Shyam_with_Rs174lacs\"><\/span>Woa, big difference. Rani ends up with Rs45.6lacs (one smart girl), Ram with Rs37.4lacs (not bad for a lazy dude) and Shyam with Rs17.4lacs.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>That is a huge difference over 25 years, and means a lot in the quality of life you can expect when you retire. Note that the Green line (Shyam) above is smooth, while the black (Rani) and orange (Ram) line in the chart above are all over the place. That is risk. Equity market is inherently riskier, but rewards higher returns for investors willing to bear that risk over medium to longer duration i.e over short periods you can lose a lot more in the stock market, but over the <a href=\"\/002-stocks-for-the-long-run\/\" target=\"_blank\" rel=\"noopener noreferrer\">long term you will come out winning<\/a>.<\/p>\n<p>This is all good in theory, but what does it mean in practice:<\/p>\n<ol>\n<li>If you are not already investing, start now<\/li>\n<li>Create a plan and stick to it<\/li>\n<li>Too much choice can lead to decision making paralysis. We will cover this in more details in another post<\/li>\n<li>Financial TV and press are valuable resources for full time traders. If trading is not your day job, do not pay attention to them.<\/li>\n<\/ol>\n<p>Visit <a href=\"http:\/\/www.kuvera.in\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">www.kuvera.in<\/a> to invest in &#8220;Direct Plans&#8221; of Mutual Funds and save BIG on commissions!!!<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The golden rule of investing is, the sooner you start investing the better your long term outcome is going to be. Invest early, invest often and invest for the long term. Just be sure that you are investing money that you wouldn\u2019t need in the short term. Let\u2019s look at an example. Rani invests Rs2,500 [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/001-start-investing-today-a-ka-the-power-of-compounding\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":2,"featured_media":16,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[91],"tags":[23,6,9,10,11,19],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Start investing today a.ka. the power of compounding - Kuvera<\/title>\n<meta name=\"description\" content=\"The golden rule of investing is, the sooner you start investing the better your long term outcome is going to be.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/001-start-investing-today-a-ka-the-power-of-compounding\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Start investing today a.ka. the power of compounding - 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