Shyamsunder was a worried father. Rohit, his son, who got a job last year, was simply spending every paisa on anything and everything but making investments. Saddened, one day he confronted his son but got a smirky “reply—“Where is the money for investments?” He wanted to argue as Rohit was staying in his house, using his car and hardly contributing to household expenses, but avoided. He simply told his son, “Invest a thousand rupees every month with an annual increase of 10%, and you will about one crore at the age of 60.” He also said “Present should be fun, but also start building retirement corpus.”
Rohit was intrigued. He said, “One crore is a hell of a lot of money to achieve by investing just 1000 rupees. I paid more at Starbucks yesterday.” Shyamsunder nodded. “Yes. Start with 1000 and step-up every year. As your income grows, so should your investments.
Not everybody has ability or willingness to invest. However a small financial contribution towards future can be a rewarding in long run. A starting monthly investment of rupees 1000 at the age of 25 years with an annual increase of 10% grows as follows:
| Rate of Return | Size of Corpus at 60 |
| 9% | ₹ 0.97 Crores |
| 12% | ₹ 1.58 Crores |
| 15% | ₹ 2.72 Crores |
Building Retirement Corpus
To build a retirement corpus, it is important to:
Start small, but start: It is important to save and invest at an early age; even a small amount of ₹1,000 a month can be a good beginning and build momentum.
Periodically increase contributions: With increments in pay, it is possible to increase investment contributions. A 10% annual increase is modest and achievable.
Remain consistent: Staying consistent helps investments to grow as a result of compounding.
Avoid withdrawals. Avoid temptations to withdraw, as they may reduce your ability to build a large corpus. However, medical and other emergencies can be an exception.
Be consistent and increase amount
Consistency and increased contributions with rising abilities allow wealth to multiply. The approach turns small, regular investments into a substantial corpus. The longer money stays invested, the more it benefits from compounding effect, as returns generate further returns. This requires discipline and patience. Wealth is not built overnight but over decades. Having goals and working towards them is the key.
Endnote
Rohit, who never considered long-term planning, saw the logic in his father words. He knew his father was right and decided to adopt the step-up approach to investing not because his father asked, but for himself. Losing weight or creating wealth, a step-up approach in life can foster sustainable improvements and help achieve goals. Small, consistent actions lead to major successes. It is important to start, and investments can always be supplemented at the time of bonuses or otherwise.