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The Clarion Call for Financial Freedom - Impact of Investing in your 20s

The Clarion Call for Financial Freedom - Impact of Investing in your 20s

Sep 05, 2018
5 mins | Views 670

Despite all the statistics on increased Mutual Fund investment, there are about 1.54*crore people investing in them. In a country of 130 crore plus people, this is less than 2%. India remains the land of cash and traditional instruments.

This puts a risk to long term financial independence and wealth creation. All empirical evidence says that traditional methods of investment cannot beat inflation especially after the tax impact. To create true wealth, we need to take the first steps towards investing and planning beyond traditional methods of investments one of them being Mutual Funds.

As we celebrated the country’s Independence on 15th Aug’18 – Let’s take a pledge to make each citizen financially independent! Let us each take the first step and pledge one day’s salary to investing in Mutual Fund for a dream or financial goal. Just one day’s salary can accelerate our path to financial freedom.

Illustration:

Rahul joins his first job at the age of 23 years with a Pharma company as a Management Trainee. He is being offered a salary of Rs.25,000/- per month. Like most of his friends, he has made a long list to splurge his first salary – gifts for his family, a new mobile and so on. On the insistence of his father, he invests an amount equivalent to his one’s day salary as a gift to his father. His father also asks him to continue this ritual of saving his one day’s salary every month for the next 27years till he turns 50.

Rahul is also made to increase this amount as and when his salary increases. He is also not allowed to use the accumulated money before the end of the tenure, but should review his portfolio from time to time.

Although not into saving & investing much, he starts an SIP in an equity mutual fund scheme as per his father’s wish.

#Source: https://everydaycalculation.com/growing-sip.php

As you could gauge from the above table, Rahul started with a meager saving of Rs.1,000 per month and ended up accumulating around Rs. 57 lakhs by the time he turned 50. That’s the power of compounding!

Perhaps the financial freedom Rahul will enjoy will be an apt gift from his father

*Source: https://www.moneycontrol.com/news/business/mutual-funds/amfi-says-mf-industry-has-1-54-crore-unique-investors-plans-to-roll-out-second-phase-of-campaign-2517397.html

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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