INVESTING THUMB RULES (PART 2 OF 5)

INVESTING THUMB RULES (PART 2 OF 5)

3. POWER OF 1%

·         Increase 1% of your savings rate every year by controlling expenses.

·         Increase 1% of your mutual fund return every year by tracking for right funds.

·         Bargain for 1% cut in your home loan rate to reduce your interest payout costs.

·         Earn 1% extra increment every year by updating skills to improve performance.

·         Reduce 1% of your monthly expenses every year by analyzing existing expenses.

·         Minimise effect of 1% higher inflation every year by utilizing interest rate hikes.

4. POWER OF COMPOUNDING

·         If you are saving for a long-term goal such as retirement, you will need to invest a much lower amount every month if you start early.

·         If you are 20, monthly investment at 10% interest p.a., becomes 5680 times till you are 60.

·         If you are 25, monthly investment at 10% interest p.a., becomes 3430 times till you are 60.

·         If you are 30, monthly investment at 10% interest p.a., becomes 2080 times till you are 60.

·         If you are 35, monthly investment at 10% interest p.a., becomes 1240 times till you are 60.

·         If you are 40, monthly investment at 10% interest p.a., becomes 720 times till you are 60.

·         If you are 45, monthly investment at 10% interest p.a., becomes 400 times till you are 60.

·         If you are 50, monthly investment at 10% interest p.a., becomes 200 times till you are 60.
·         If you are 55, monthly investment at 10% interest p.a., becomes 70 times till you are 60.