Procrastination is Not an Option

Of all the traits required to be a successful investor, the most sought after is patience. Time is your most valuable asset in investing. Hence, it is rightfully said that time in the market beats timing the market. This means the longer you remain invested, the better you will reap the benefit. Take the example of two friends, both 25 years of age, who, after graduating from a reputed business school, started their career together. One of them started to invest for his retirement with his first salary while the other waited for the next five years to make his first investment. In such a case, the difference in the final corpus can be striking.

Assuming that the early starter invested ₹10,000 per month and earned return of 12 per cent per annum, his total corpus at the end 60 years would work out to be ₹6.43 crore on an investment of ₹42 lakhs. With the same assumptions of the investment amount and returns, the late starter’s investment of ₹36 lakhs would have grown to ₹3.5 crore. Therefore, while the first one’s investment would have grown by 15.31 times the investment amount, the second one’s investment would have grown 9.71 times of his investment. This clearly shows that planning and being an early mover helps accumulate more wealth. 

Procrastination in investing can have a significant impact on your long-term financial goals. The longer you delay investing, the harder it becomes to achieve your desired outcomes. Time is your most valuable asset in investing and procrastination can be your biggest enemy. Nevertheless, investing is not only about starting early but using a strategy for the various stages of your life. As we move through different phases of life, our financial goals and needs change. You cannot take the same risk when you are about to retire compared to when you started your career. Our special report in this issue will help you understand the different stages of life and how to align your investment with each such stage.

Shashikant Singh
Executive Editor