WEALTH BUILDER

How Much are You Really Worth?   Consider a monthly salary of Rs 10,000 per month. Over a 30-year period this salary will mean a total earning of Rs.36 lacs. If this entire salary could be invested at 10% per annum (rate of return) at the end of every month during this period, this will mean a sum of Rs 2 Crores 23 Lacs 70 Thousands at the end of 30 years. Check the following table to find out results for different periods and different rates of return: Rs10,000 Per Month Will Become At 10% Per annum At 9% Per annum At 8% Per annum At 7% Per annum Rs Lacs Rs Lacs Rs Lacs Rs Lacs After: 30 Yrs 223.70 182.58 149.73 123.42 25 Yrs 131.77 112.12 95.74 82.07 20 Yrs 75.67 66.96 59.41 52.85 15 Yrs 41.43 38.03 34.96 32.20 The above data give you an idea about the size of your salary cake for the rest of your working life. Creating a fortune would begin with holding on to biggest possible slice out of this salary cake... For example, a person holding on to 10% of his salary of Rs 10,000 per month for 25 years will have managed to create Rs 11.21 lacs at 9% per annum, a sum relatively immense for somebody earning only Rs 1.20 lacs per annum... This is true at every salary level and at any rate of return on account of regularity and time value benefits... Salary earners get known amount of earning at known dates. House and consumer durable purchases are financed through EMIs (equated monthly instalments) of loan repayments by utilising this known income stream to make these purchases affordable... You have to use the same power of salary to build your wealth, and the result will obviously be a miracle... Begin your wealth-building exercise by investing in low risk investments. Increase your risk exposure by investing in higher return investments once your foundation is strong and you become more familiar with investments.
The Magic of Compounding
Did you know that higher the frequency of interest payment, higher is the actual interest paid to you?
Amount of interest received if you invest Rs. 1,000,000  @ 12% p.a. for 10 years at various interest payment intervals.
"You can create your financial future through Simple, Systematic, saving  and Investment Plan of PPF.
If you invest Rs 2,000 a month for 30 years in Public Provident Fund, which  gives you a 8 percent annual return, Rs 720,000 balloons into Rs. 4,777,000.
The magic of compounding makes Rs 5,000 a month grow 6.6 times.

Maturity value of your PPF savings (in Rs.)     (total amount invested is shown in brackets)
Saving horizon	Rs 2000 a month	Rs 5000 a month
5 years	149,000 (120,000)	374,000 (300,000)
10 years	401,000 (240,000)	1,003,000 (600,000)
15 years	8,26,000 (360,000)	2,064,000 (900.000)
20 years	1,541,000 (480,000)	3,852,000 (1,200,000)
25 years	2,746,000 (600,000)	6,865,000 (1,500,000)
30 years	4,777,000 (720,000)	11,941,000 (1,800,000)