Wealth watch: Financial planning in your 20s
Why Financial Planning: Einstein calls it the 8th wonder of the world. It has power to create enormous wealth for people who persevere and hold on to it. This is compounding rate of return. Compounding return is nothing but earning returns over returns as well as principal. The wealth created by compounding rate works in favour of those who have larger earning period remaining in their life. This article will focus on such people. I will worry about it later, I am young and I will have fun for now. While this is certainly something that all of us do in our young age, we have to also build the discipline to save a part of our income and invest to reap benefits in future. The discipline that we build now will keep us in good stead years later. Moreover, compounding works in the favour of people who start investing early than those starting later in life. Here is a sample of the power of compounding. It assumes a person starts investing Re. 1 per month at various stages of his lif...