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Early to Save

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Submitted By ankit27668
Words 648
Pages 3
Reasons to save early: 1. More Time to Save: The simple fact is that if one starts saving early, he/she will likely be able to save more. There's no secret tip or strategy as to why: he/she just have more time to put money away.
For example if a person starts saving at the age of 30, he/she will have 35 years to save before retirement at age of 65. So with small amount of 1000 saving every year he/she will have a lot of time to save at age of 65 he will save 35000 which will grow over the years, but if the person starts saving at the age of 45 he will have only 20 years to save. At the age of 65 he will save only 20000. Which is quite a small amount compared to previous one. So his savings will be less.

2. More time to grow: Essentially, compound interest is the interest earned on interest. By continuously reinvesting your earnings, you are exponentially increasing your return on investment. Investors understand the benefits of investing early and taking advantage of the potential gains from compound interest.
In the above case the person who saves early his money will grow with 10% rate and at the age of 65 his money will amount to 271024.but for the person who starts late his total savings after growing will amount to 57275.

3. Small Investments: To meet a goal in future if one starts early he/she will have to invest small amount every year to meet that goal. This will be easier for the person. But if he starts late he/she will have to invest large amount to meet that goal, which may not be easy always.
For a person who earns 40000 per month he can invest 2000 per month easily to meet his future goal. But if he needs to invest 10000 per month to meet his goal it will be difficult for him. 4. Avenue Factor: If a person starts early he/she has a lot of avenues to invest. Depending on the risk appetite of the person he /she can go for Equity,

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