Save and Invest, not in coming time, but right from Now! Cos, the cost of delay in doing the same, or the cost of “procrastination” can be huge J

 Don’t delay your savings& investments!Waiting to begin a savings & investment plan can have a huge impact on the results. A delay of even a few years could cost lakhs of rupees.

We see, read, hear, watch common people who have become famous because of their investment success till now.  Some of the big names that come instantly are Rakesh Jhunjhunwala, Radhakishan Damani, Dolly Khanna, and not to definitely forget the World’s greatest investor, Warren Buffet, who have self-grown their fortunes through hard work, smart work and timely work.  We aspire to become like them, we talk with others about them. But when it comes to us, we say

“Not today, we shall start soon.”;

“I am broke, I do not have money right now”;

“I shall start from next month”;

“I am waiting for my bonus”;

“I have to pay off EMI’s”;

“My luck is bad and I will lose money”;

and other such negative or procrastinating lines.

But, we have all the time to “Not think of our future” and “thinking that this is not urgent right now” and “we shall look at the same after some years”.

It is best not to delay savings and investments.  There is a lot of said and done about investing. It is like the basic necessities of life.  While you do need food, clothing and shelter to survive, you also do need to Save, Insure and Invest to survive financially in a better manner too.  Therefore, if you have already decided to invest and know the merits of long term value investing, why miss out on good returns by delaying?

Cost of Delay is the cost to bear as a result of delay in investment. Any delay in making an investment leads to a cost/loss. The accrued interest or return on the investment for the duration of the delay has a significant effect on the net returns. The cost grows with the period of the investment; longer the investment more is the cost.  In simpler words, Cost of Delay is the cost as a result of delay in investment.  And you don’t want to incur costs.

Here is why you should start investing now and not wait for another time to start!

Variation in returns if you start late

Delay in Investing can lead to comparatively lower returns as you lose out the effect of the power of compounding.  The power of compounding can make money double, triple, quadruple etc, quicker and therefore, the earlier you start investing, the faster your money grows.

Magic of investing small and growing big is lost if you start late

Best explained through an example – Mr S-I-I starts investing Rs. 1000 per month and his money starts growing at 10% CAGR, by the 5th year, he would have invested Rs. 60,000/- which would have grown upto Rs. 77,437/-. Seeing the substantial growth, finally you make up your mind and you decide to invest double the amount (i.e. Rs 2,000 per month) for next 5 years (assuming that you will make same returns). Rude shock! While Mr S-I-I makes Rs 204,845 at the end of 10 years (investing only Rs 120,000), you end up making only Rs 154,874 (investing Rs 120,000).  That is the magic of compounding. You may have to invest more than 3 times of Mr S-I-I’s monthly investments to get closer to the same returns.

Starting Young allows you to take risks

Not much of responsibilities hover when we start working. Therefore, taking the risk and investing can help a lot and could be the value proposition in the future.  However, if you delay, you may not be able to take in risks and may result in having lower growth in your wealth.

Constantly changing lifestyles and Inflation

You do not know how the situation would be in the future.  Having a second source of income by investing from early stages of your life can help you achieve more and ward off the evils of inflation and support your changing lifestyle in coming years.

Tips to kick out procrastination

Sometimes, procrastination takes place until the “last minute” before a deadline (Financial Year closure and rush to take tax-saving instruments, ONLY to buy into not-so-effective instruments).Procrastination can lead to feelings of guilt, inadequacy, depression and self-doubt.

To overcome procrastination in investing (as well as in life), the following may help:

  • Be aware of habits and thoughts that lead to procrastinating.
  • Seek help for self-defeating problems such as fear, anxiety, difficulty in concentrating, poor time management, indecisiveness, and perfectionism.
  • Evaluate your own goals, strengths, weaknesses, and priorities.
  • Set realistic goals, and develop a personal positive link between the tasks and the concrete, meaningful goals.
  • Restructure activities of daily life.
  • Modify your environment for that newly gained perspective. For example, eliminate or minimize noise or distraction; put effort into relevant matters; reduce day-dreaming.
  • Discipline yourself to the priorities you set.
  • Motivate yourself with enjoyable activities, socializing and constructive hobbies.
  • Tackle issues in small blocks of time, instead of trying to solve whole problems at once and then be intimidated.
  • To prevent relapse, reinforce your pre-set goals based on needs and allow yourself to be rewarded in a balanced way for accomplished tasks.

Stop procrastinating and start investing, for a happier and brighter future, Now

(With certain inputs from Wikipedia – Thank You)

  • Mohit Bajaj