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Author Topic: Invest early for more returns  (Read 2298 times)

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Invest early for more returns
« on: October 04, 2008, 12:45:22 PM »
When the youths are in their first job or in college, savings and investments are the last priority or you can say NO in their agenda.
This mental situation is among most of the youth, because they are not aware of benefits of investing early. Even a investing of a very small amount will add up in huge amount in future.
Now we will see how to spend less and save the money and invest.
1. Prepare your expense sheet -
    - Calculate how much you spend on entertainment, movies, clubs or parties etc.
    - Calculate your utility bills you pay monthly like cell phones.
    - The bottom-line is to find the ways where you can cut down your extra expenses and
       save for bucks.

2. Careful use of credit cards –
    - Most of the youth do unnecessary credit card purchases and later on keep paying
       heavy interest rates. 
    - Credit cards charges top interest rates as compared to all other borrowings so take
   proper precautions while using credit cards.
-  Make use of card only when needed in emergency to pay insurances EMI, mutual
    funds EMI etc.

3. Power of compounding –
    - The word compounding in financial sector can do miracle.
    - To make use of compounding you have to start investing early.
    - To get more idea, have a look on example,

Example -
Suppose you Invested RS 50,000 for 3 years at 10 % at simple annual interest rate.
Simple interest rate = P x I x N = 50,000 x 0.1 x 3 = 15,000 (where P = Principle, I = Interest, N = Number of years)
Note - You earned total interest of RS 15000 for period of 3 years
Now lets see how compounded interest rate works       

Suppose you Invested RS 50,000 for 3 years at 10 % at compounded annual interest rate.
Interest for Year 1 = P1 = P x I x N = 50,000 x 0.1 x 1 = 5,000 (total = 55,000)
Interest for Year 2 = P2 = (P1) x I x N = (55,000) x 0.1 x 1 = 5,500 (total = 60,500)
Interest for Year 3 = P3 = (P2) x I x N = (60,500) x 0.1 x 1 = 6,050 (total = 66,550)
Total interest earned over the period of three years through compound interest rate = 5000 + 5500 + 6050 = 16,550.   
Now you can compare this to 15,000 earned over the same number of years using simple interest rate.   

So, now I feel no need to explain further, get up and start investing.
    Stop borrowing and spending – Generally youths in their first job or during college
    period does borrow from friends and spend in parties, movies or on electronic gadgets
    This will add up to heavy debt at the end of the month. So, if possible try to avoid them
    and plan to save some funds.
    Resources to invest
    There are various ways to invest; you can plan to invest where you will get minimum
    8% to 10% per annum. If you get higher that is better but if you get at least minimum     
    then also you will reach your targets.
    Various resources where you can look to invest should have monthly EMI facility so
    that it will be convenient for you to invest per month.
    Have a look on following resources,
1.   Mutual funds
2.   Pension plans
3.   Insurance plans
4.   Banking recurring accounts – Get proper information before you start this accounts.
For more clarification and free guidance please visit at, newbielink:http://www.daytradingshares.com [nonactive]


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Re: Invest early for more returns
« Reply #1 on: February 19, 2009, 06:00:53 PM »
When I see College students investing I am so jealous I didn't do some when I was in college.
Checkout Kaboomstocks at www.kaboomstocks.com/forum/


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Re: Invest early for more returns
« Reply #2 on: August 27, 2009, 02:05:14 AM »
Hi Friend ,
Karan Bilimoria  is the founder of Cobra Beer. Bilimoria’s success story is truly inspiring and motivating. All those dejected with failed businesses and entrepreneurship should look to Bilimoria for his astounding success. As a qualified chartered accountant, he had a long stint with Ernst and Young, which he describes as life-learning and  invaluable. He also possesses a law degree from the University of Cambridge. http://www.londonspeakerbureau.co.uk/Karan_bilimoria.aspx
Gud Luck.


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Re: Invest early for more returns
« Reply #3 on: October 08, 2009, 05:25:02 AM »
Hi, Stay away from the markets for a few days, we might be hearing some good news from US by end of next month. May be the economy will revive then. Every raise in the market is only leading to a deeper fall. This is not a good sign. Once we see a sustaining raise, you can start investing. Its better to invest at a little heigher levels when the uptrend establishes, than to invest now and get butchered.

The commodity markets too are in new highs and correction is expected. So, sit on cash, than investing now.Estate Agents


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