Retire Rich Invest Rs 40 a day

TAKE away the terms asset allocation, long term and compounding from a financial advisor's vocabulary and he is pretty much tongue-tied," remarks a friend.

But those are the exact three words that can help you retire with Rs 40 a day. Let me show you exactly how. Say you can set aside Rs 40 every day for your retirement. Where do you get Rs 40 a day? Why not cut down on those cigarettes? Then, let's see what could happen.

Let's also make some assumptions (do allow for the fact that all may not be valid). Let's also suppose that these are valid for the next 30 years.

Instrument	Yield (%pa)
PPF	8
Sensex	18
Equity	21

Retirement Chart

Money saved per day	Rs 40	Rs 80	Rs120
Money saved per year	Rs 14,600	Rs 29,200	Rs 43,800
Money earned if invested over the next 30 years
Sensex	Rs 11,547,841	Rs 23,095,681	Rs 34,643,522
Equity	Rs 21,099,200	Rs 42,198,399	Rs 63,297,599
PPF	Rs 16,53,935	Rs 33,07,870	Rs 49,61,805

Nice chunk of change, eh?! Doesn't that make your retirement look so comfortable?

Of course, if you spend Rs 120 per day on cigarettes, you probably won't live for 30 years!

Ah, now you are saying you don't smoke? Maybe you're a frequent restaurant-hopper? That would easily mean Rs 2,000 per week. Keep at it for 30 years and you would have said goodbye to Rs 15 crore. Think of the holidays you could have afforded with that kind of moolah!

Posted via email from tamalb's posterous