Vinayagar
Chaturthi Special: The Best Day to Start Investing...!
Sivakasi Manikandan, MD, AIS MONEY, ARN-33652,
+ 91 98405 77675
“Dad, if I had started investing
₹10,000 every month ten years ago, how much money would I have today?”
Arun asked
this question while looking at his father’s old investment statements.
His father
paused for a moment.
“That is
exactly the question you should have asked ten years ago,” he said with a
smile.
Arun
laughed. “I know, Dad. At that time, I thought ₹10,000 was too much to invest
every month. I had a car loan, rent, school fees and so many other expenses. I
kept telling myself, ‘I’ll start next month.’”
His father
nodded.
“That ‘next
month’ is one of the biggest enemies of wealth creation.”
Arun looked
puzzled.
“What do you
mean?”
“People
often wait for the perfect time to invest. They wait for the stock market to
fall, for their salary to increase, for a bonus, for a loan to be repaid or for
their expenses to come down. But the perfect time rarely arrives. Meanwhile,
the years keep passing.”
That
conversation took place just before Vinayagar Chaturthi.
Arun then
asked, “People say Vinayagar Chaturthi is an auspicious day to start something
new. What should I start this year?”
His father
smiled.
“Start something that your future
self will thank you for. Start investing.”
That simple
conversation carries an important lesson for every salaried person and every
family.
We often
celebrate new beginnings in our personal lives. We buy a new house, start a new
business, change jobs, purchase a vehicle or make a new resolution. But how
many of us consciously choose a day to begin building our financial future?
Vinayagar
Chaturthi can be that day.
Not because
a particular festival can guarantee investment returns, but because a meaningful financial habit needs a starting point.
A small
monthly investment started today can potentially become a substantial corpus
over the next 10 or 20 years. The secret is not finding the perfect market
level. It is starting early, investing regularly and giving the money enough
time to grow.
What Is the
Best Day to Start Investing?
“Let the
stock market fall a little... I’ll start next month... I’ll invest when I
receive my bonus...” Many people keep postponing their investment decisions for
one reason or another.
But the
biggest obstacle to investing is not stock-market volatility.
It is the habit of not starting.
An
investment that begins at ₹5,000 a month today can become ₹10,000 as income
increases. Later, it could be increased to ₹15,000 or ₹20,000. The important
thing is to develop the habit of investing regularly.
That is why
Vinayagar Chaturthi can be treated as a symbolic new beginning for your
financial journey.
Mantra 1:
“Start Today!”
You do not
need a large amount of money to begin investing. Even ₹5,000 a month can be a
meaningful starting point.
For example,
if you invest ₹5,000 every month and the investment earns an average annual return of 13%, the total amount invested
over 10 years would be ₹6 lakh. The investment could grow to approximately ₹12.2 lakh.
If the same
investment is continued for 20 years, the total amount invested would be ₹12
lakh, while the value could grow to approximately ₹56.7 lakh.
The
important point here is that the amount invested is only ₹12 lakh, but the
power of long-term compounding can potentially increase its value several times
over.
Mantra 2:
“Invest First; Spend Later!”
For many
people, the usual practice is to receive their salary, pay all their expenses
and invest whatever remains.
A better
approach can be to set aside the investment amount as soon as the salary is
received and then plan expenses with the remaining money.
A person
investing ₹10,000 every month would invest ₹12 lakh over 10 years. Assuming an
average annual return of 13%, the investment could grow to approximately ₹24.4 lakh.
If the same
investment is continued for 20 years, the total investment would be ₹24 lakh,
while its value could grow to approximately ₹1.13 crore.
The lesson
is simple:
Investing a small amount consistently
over a long period can become the foundation for creating substantial wealth.
Mantra 3:
“Time Is Your Friend!”
The real
power of investing becomes visible as time passes.
The stock
market will experience both rises and falls over the years. Short-term declines
are a normal part of equity investments, including equity mutual fund schemes.
Therefore,
equity investments carrying market risk may not be suitable for financial goals
that are only two or three years away.
On the other
hand, for long-term goals such as a child’s higher education or retirement,
which may be 10, 15 or 20 years away, equity mutual funds can be considered as
part of a properly planned investment strategy, depending on the investor’s
risk tolerance and financial goals.
The longer the investment period,
the greater the potential impact of compounding.
From ₹5,000
to ₹20,000 a Month... How Much Can It Become in 20 Years?
The
following illustration shows the potential power of regular monthly investing.
|
Monthly Investment |
Total Invested in 10 Years |
Value After 10 Years* |
Total Invested in 20 Years |
Value After 20 Years* |
|
₹5,000 |
₹6
lakh |
₹12.2
lakh |
₹12
lakh |
₹56.7
lakh |
|
₹10,000 |
₹12
lakh |
₹24.4
lakh |
₹24
lakh |
₹1.13
crore |
|
₹20,000 |
₹24
lakh |
₹48.8
lakh |
₹48
lakh |
₹2.27
crore |
*Illustration
assuming an average annual return of 13%. This is not a guaranteed or assured
return. Actual investment values will vary depending on market performance.
One figure
in particular deserves attention.
A person
investing ₹20,000 every month would invest a total of ₹48 lakh over 20 years.
If the investment were to generate an average annual return of 13%, its value
could potentially reach approximately ₹2.27 crore.
That is the
difference long-term compounding can make.
Mantra 4:
“Don’t Try to Beat the Stock Market!”
“When is the
stock market at its peak?”
“When will
it fall?”
“When is the
right time to invest?”
Constantly
trying to answer these questions can leave investors confused and anxious.
Predicting
short-term movements in the stock market accurately is extremely difficult.
Instead,
investors can focus on their long-term financial goals and follow a disciplined
monthly investment approach.
When the
market falls, rather than panicking and stopping investments, investors should
remind themselves of their financial goals, investment horizon and ability to
tolerate risk.
Instead of trying to predict the
market, focus on managing your investments with discipline.
Mantra 5:
“Don’t Just Look at the Investment; Look at the Financial Goal!”
Investment
is only a tool for building wealth. The real purpose is to achieve important
financial goals in life.
How much
will be required for a child’s higher education?
How much
will be needed every month after retirement?
How much
money will be required to buy a house?
How much
should be set aside for emergencies?
Investment
planning becomes more meaningful when these questions are answered first.
For example,
a person planning to retire 20 years from now should not look at a ₹10,000
monthly investment merely as an investment.
Instead, it
should be viewed as the first step towards building a
retirement corpus.
Can You
Start with Mutual Funds?
Many
investors choose monthly investments through equity mutual funds for their
long-term financial goals.
However,
choosing a mutual fund scheme should depend on the investor’s financial goal,
investment horizon and ability to tolerate risk.
An average
annual return of 13% can be used as an assumption for illustrating long-term
investment growth, but 13% is not a guaranteed return.
Equity
investments can deliver high returns during some periods and low or even
negative returns during others. Therefore, the 13% figure used in these
calculations is only an assumption for illustration and should not be
considered a promise of future returns.
Before
investing, investors should also ensure that they have basic financial
protection in place, including an emergency fund, adequate health insurance and
appropriate life insurance where required.
Teach
Children the Habit of Investing
Vinayagar
Chaturthi can also be an opportunity to teach children about money.
Parents can
encourage children to save a small portion of their pocket money and explain
how savings can eventually be used for investments.
The habit of
understanding that “not all the money we receive
should be spent; a portion should be saved and another portion invested”
can become a valuable financial lesson for life.
Make a
Financial Resolution This Vinayagar Chaturthi!
Along with
buying new clothes, decorating the house and worshipping Lord Ganesha, why not
begin one more meaningful activity this Vinayagar Chaturthi?
Make a
resolution:
“I will invest a fixed amount
every month for my future.”
It could be
₹5,000 a month. It could be ₹10,000. If your financial situation permits, it
could be ₹20,000 or even more.
The amount
may be small.
But the habit of investing
consistently should be strong.
As your
salary and income increase, you can gradually increase the amount invested.
This can help you move closer to your financial goals and potentially
accelerate wealth creation.
Vinayagar
Chaturthi is traditionally associated with removing obstacles. This year, let
us remove one important financial obstacle—the habit of postponing investments.
A small
investment started today can become a meaningful amount in 10 years and
potentially a substantial corpus in 20 years.
So, don’t keep searching for the
perfect day to start investing. The day you start is the best day to begin your
investment journey!
This opening
gives the article a stronger “missed opportunity → realisation
→ festival → investment lesson” arc, which should work better
for a financial-magazine feature.
For More details and investment
Sivakasi Manikandan, MD, AISMONEY
Sivakasi Manikandan, MBA (F&M), [MBA, I & FP],
FChFP, CIS, AMFI, CII (London)
Managing Director – AISMONEY
AMFI Registered Mutual Fund
Distributor - ARN-33652
No. 21, MBT Road, (Opp) Indian Bank, Walajapet - 632 513
Ranipet Dt. Tamil Nadu, India.
+ 91 98405 77675
+ 91 96777 66393 (Office)
support@aismoney.com
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme
related documents carefully. The past performance of the mutual funds is not
necessarily indicative of future performance of the schemes.
