There is a very old saying- “early bird gets the grain” and there is also another saying that reinforces the first. It is-“well begun is half done”. Both hold true in many aspects of life but financial planning is one area where they are completely applicable and most relevant. The early you start, the more you stand to gain. Your wealth creation depends on the time you give your investments to multiply and how effectively you apply wealth management tactics. The more the time period, the higher the gains. But it is very interesting to note that early starters have an edge in terms of time. This is to say that you can gain more despite investing less in comparison to the one who starts late but invests more.
It can be illustrated better with the help of a story. Two friends Ajay and Vijay aged 25 are employed in good jobs. Both are earning well and thus, have got surplus. Ajay decides to invest 10,000 per month whereas Vijay ignores investment and splurges on different things. When both reach 40, Vijay realizes he needs to invest as now he has a family and retirement is also near. So, he starts investing 20,000 per month while Ajay continues with his 10,000. When both retire at 60, Ajay has invested a total of 42,00,000 while Vijay’s investments boil down to 48,00,000. You will be surprised to know that Ajay gets a return of 5.4 crore while Vijay gets 1.8 crore.
So, you should always plan early and go for goal based planning. Now, you would be tempted to ask what exactly is goal based planning. Well, it refers to comprehensive planning for the future with goals in mind while making sure one’s present financial state is also in good health. It is about figuring out the best plan according to one’s needs, requirements, risk appetite and the market conditions. It takes into accounts all the important junctions of life that will influence your financial health. For example, marriage, education of child, buying a home and retirement are those significant points that have to be given due importance and should be planned in advance.
There are so many factors that have to be taken into account while devising a plan and it is not just about investment and savings. It is also about wealth management, tax benefits, insurance, loans, estate planning and many other finance related matters that can be best sorted with the help ofa financial planning and investment advisory service provider. To make the most of your wealth, you need a prudent and dynamic plan that will work in your favor even when the market behaves adversely or you are faced with a financial emergency.
Remember, time is money and every moment that you dedicate to your money goes into the creation of a robust monetary portfolio. It will lead to holistic wealth creation that can take care of all the goals you have set for yourself as well as your family.
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