Independence Journey

Independence Journey

On 15th of August India is going to celebrate it’s 71st Independence day…If we can just reflect, the difference between being independent and not is that one has Freedom of Choice and Time is when one is independent.

Let us learn the importance of Freedom or Independence thru a Story

Ram and Shyam were 2 college friends who were studying in the final year of the college. One day they attended a financial planning workshop in their college. Post the workshop both the friends decided that they will start savings Rs. 10,000 a month till the age of 60. So that they are financially independent at the age of 60. They calculated that they need to save just Rs 10,000 a month.

20 years they again met at a college reunion. Shyam was shocked that he had forgotten about the same & had not even started. So Shyam started again & this time he had to save Rs. 20,000 to reach a figure of Rs. 48 lakhs, what they had planned initially.

So Ram invested Rs. 10000 a month for 40 years & Shyam invested Rs. 20,000 a month for 20 years & both at the end of the term had invested Rs. 48 lakhs each.

Friends if we assume that both of them got a return of 15% pa on their investments, the difference of the end corpus was shocking…

Shyam got 3 crores, whereas Ram got 31 crores…

Yes 31 crores…..   

This week’s Fisdom:

What we learn from the above is

  1. The magic of power of compounding is seen to be believed ….3 Crores v/s 31 crores is a big big difference…
  2. Ram needed to save only 10,000 per month to reach his goals…Thus he could enjoy all his surplus income for his lifestyle expenses…and still he was sure of reaching his goal…
  3. Whereas Shyam needed to save double the amount and thus probably sacrifice some of family enjoyments….all thru the journey too..
  4. So Friends , let us on this auspicious day of India’s Independence , pledge ourselves to become Truly Independent !!     Jai Hind !!

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