This is something that people call as a life hack but honestly, I feel it’s more of a mandatory step you need to do if you wish to earn and beat the inflation!
Money definitely grows, but not on trees…
Everyone has heard of this: SIP or Systematic Investment Plan. Influencers, Tiktokers and everyone else on mainstream social media have been talking about it: 30x returns, Start with only a couple of dollars or whatever. It’s true, a powerful tool to mint your money in the long run.
Okay, wait a second. Let me explain it from square one:
Imagine you can save $100 every month, and you stash it up in your piggy bank for the next 10 years. with this discipline, you would have accumulated a total of $12,000, which you could use for your college or something.
Cute Piggy 🙂
But what if you Invested this $100 in a bank, for example, and checked what they would pay net?
Taking the average of leading banks, you can consider an interest rate of 3% per annum, and your $12000 in 10 years would be $15600!
Money Trees
Yes, your money grew, but not to a great extent.
If you had put the same amount more systematically and every month you invest into something called an SIP, by the end of 10 years, considering the average returns of an SIP to be around 12%, you would have
.
.
.
(drum roll)
a whopping $23,234
That’s like double the amount you would get from a piggy bank!
This is called compounding, where you will get interest paid on the amount you invest altogether, instead of the principal you invest in total.
To make it even more interesting, what if you could continue investing for another 5 years, you would have $50,458, which is like 3x returns!
Or
If every year you increase the investing amount by 15%, i.e. the first year you invest $100 and the second year it $115 and the third year $132.25 and so on, by the end of 10 years, you are left with $42,611
Arent these numbers quite fascinating?
People tell Compounding is the 8th wonder of the world. Ones who understand , earn it and those who neglect, pay for it.
Start Investing, but research your market well before you invest.
Imagine I tell you another secret tool that is 10 more powerful than this….
Stay tuned for my next article and follow me up for more financial freedom advice and strategies, to beat inflation!
We got this, My friend, we got this!
