NEWS

Invest for 20 years and see how your sixth crore comes from 90% returns on just 10% investment

The phenomenon of compounding transforms your money into a powerful income-generating tool. Compounding is the process where the value of an investment increases because the earnings on an asset, both capital gains and interest, earn interest as time passes. This ‘interest on interest’ effect can make seemingly small amounts grow exponentially over the long term, providing the potential for impressive returns. So, set your target and work towards achieving your goal. The sooner you reach the first milestone, the faster you'll achieve your second and third crores. According to the FundsIndia Research Report, if you invest Rs 70,000 per month at a 12% annual return rate, you can attain your first Rs 1.1 crore in a painfully long eight years. If you continue investing, adding another four years will halve the time required for the second Rs 1.1 crore, and the third Rs 1.1 crore can be achieved in only 3 years. This is the remarkable power of compounding, and by the 20th year, you'll be adding nearly Rs 1.1 crore every year to your wealth.