o Big Eyes:- To look beyond today’s needs
& plan for the future
An investment is all about
future. One needs to plan today so as to meet commitments arising in future. A
typical working person will have all or some of the goals in life as under:-
1. Buying a home
2. Children
education
3. Vacation
with family
4. Buying
a car
5. Children
marriage
6. Retirement
A person has a finite working
life during which not only has he got to provide for current expenses, but also
accumulate funds to meet future liabilities as stated above.
o Big Head:- To plan big goals in life
Inflation raises the cost of
the goal with every passing year.
For example The Fees and other charges payable by the
PGP students of the 2015-2017 batch for their first academic year is
approximately Rs.8,88,000/-. (IIMA)
Assuming there is no cost
escalation for next 10 years; Mr. Sundar will have to accumulate a sum of Rs.23 lacs for his son who wants
to pursue MBA. (Sectoral Inflation assumed 10%). This is just for the higher
education of his son. His daughter wants to pursue medicine and will be seeking
admission in next 12 years.
Then there are other goals
also which also needs to be provided for.
o Large ears:- To
listen & act on professional expertise
Remember these are YOUR goals---set by yourself. You and
only you are responsible for its achievement. Take professional help(Read:-Free advise can be costly). Professionals like a financial planner are
experts that can help you in working with your goals—taking into account your
income, expenses & savings. They can help you by drawing up a financial
plan for yourself which will tell you whether these goals are achievable or
not. If not, they will also suggest remedial measures. Remember, fees that you
pay will only be a fraction of what you will achieve—financially.
o Broken tusk:- Monthly
sacrifice needed for pursuit of wealth
A small financial sacrifice made
today can ago a long way to meet your goal.
Mr. Sundar eats out on Sundays
with family with average monthly billing of Rs.10,000/- approximately. If
instead Mr. Sundar eats out only twice and manages to save say Rs. 5,000/-, it
can go a long way in meeting education expenses of his son. If he invests this
saving of Rs. 5,000/- by way of SIP for next 10 years, he can accumulate a sum
of Rs. 13.75 lacs (assuming a return of 15%)
o The axe:- To Cut off portion of your income
to save regularly
Today’s pain is tomorrow’s
gain they say. Warren Buffet says-“spend
what is left after saving, rather than save what is left after spending.” START AN SIP TODAY.(Read--yahi hai right way)
SIP is the best vehicle to create wealth. Compounding works best through SIP. A
monthly SIP of Rs. 10,000 can yield a corpus of Rs. 3.20 crores over 25 years (returns
of 15%CAGR).
o Large stomach:- To
compound your investment & grow your wealth
Albert Einstein has described compounding
as the 8th. wonder of the
world. Compounding works best over long term. For example an SIP of Rs. 10,000
in DSP BR TOP 100 Equity fund since April 2003(a month after its inception)
would have yielded a corpus of Rs. 47.30 lacs(against an investment of Rs.
15.10 lacs)---an annualized return of 16.99%.
