Power of Regular Savings – Part 1

August 2, 2011   ·   0 Comments

Most of Indians would have heard about this saying: “Boond Boond se Sagar Banta hai” meaning drop by drop, oceans gets filled. Similarly, www.stockssavvy.comevery paisa makes a rupee and every drop of your sweat will raise your status and you will prosper in life. Today we are going to see how drop by drop make an ocean i.e. power of regular saving in a life.

I could not help it wonder why most of the people failed to get their financial goals.  Why life of the people is running on credit? Why every liability seems to burden them? A person keep on chasing better pay packages throughout their career but is earning less really the problem?

Let me ask you something while you wonder how much money is in your saving account right now? There are two scenarios right now: First is your account is in overdraft. Each penny which comes in goes out. The problem here is not earning less; the problem is managing your budget & expenses with your earnings. The other scenario is your saving account is having money & after some time, the money gets spent because you needed something which has uttermost importance in your or your beloved life. The problem here is where people doesn’t understand the & how to achieve the financial goals.

Power of Regular Saving:

Returns Percentage/Years 10 Years 20 Years 25 Years 30 Years 35 Years
10 % 2,06,552 7,65,696 13,37,890 22,79,395 38,28,277
15 % 2,78,657 15,15,954 32,84,073 70,09,820 1,48,60,645
20 % 3,82,363 31,61,479 86,26,708 2,33,60,800 6,30,83,478

Disciplined investment of regular saving of 1,000 Rs per month at interest rate of 20% can make you a crorepati in around 26 years. Who would believe me if I say a disciplined investment of 1000 Rs. is enough to make you a crorepati but it is true. If an investment of 1000 Rs can help me become a crorepati, imagine the power of money if one save a little more systematically in right instruments can help them realize their financial goals.

The concern here is most of the people doesn’t have a financial plan. Why they don’t have financial plan? Because they don’t have set financial goals. If you wonder what are financial goals for a person. Here is the list of them

Financial Goals

  • Which car do you want to buy & at what age do you want?
  • Any further studies you want to do in your life?
  • Type of house you want to own, how much it will cost & at what age?
  • Which city do you want to get settled?
  • What other luxuries you want in your life & at what age?
  • When do you want to get married?
  • Where do you want to go for you honeymoon?
  • How many kids you want to have?
  • Do you have any other wish list?
  • At what age you want to retire?

There is no use of buying a car at the age of retirement or similar is the case of other financial goals too. That is the reason each goal should have a www.stockssavvy.comset age when you want to achieve those things in your life. One can have a wishlist. It is the job of your financial planner to see if those things are feasible or not according to your present situation.

How many of you have set your financial goals? Is it different from the above list? or it is only a part of goals which you have written with you? Share it with us here. Also, how many of you are still thinking that you’ll took a day out to do it. Have you ever thought that why that day has never arrived yet?

After financial goals, here is list of the financial planning for which you need to do to save right amount in right instruments to help fulfill your wish list at a proper age.

Planning for the wishlist & liabilities:

  • House Loan
  • Car Loan
  • Education Loan
  • Expenditure for a decent life in a city
  • Expenditure in setting house
  • Life Insurance Cover
  • Disability Insurance Cover
  • Health Insurance
  • Marriage Expense
  • Honeymoon Expense
  • Baby born hospitalization Expense
  • Education Expenses in school & then college
  • Same to be repeated if you want another child
  • Retirement Planning

What is the hindrance of achieving the financial goals? Its Inflation. Historically, from the time of independence, India has seen Inflation Index of 6.68 % on an average basis. What does this mean?

If you have an expenditure of 25,000 Rs. per month today, this is the amount of money that will be required for monthly expenses

After 25 years After 30 years After 35 years
1,25,897 Rs. 1,73,952 Rs. 2,40,351 Rs.

Are you hedged against inflation? The first part of regular saving talked about power of regular saving & financial goals & planning & its importance. In the next series of regular saving, we’ll share how much one needs to save regularly for each category to achieve these financial goals

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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