Super Gann Trader Academy, which conducts stock market courses in Delhi, offers free trader awareness lessons.
Mr. Raj has got his first job. He decides to save money for future. He begins investing his saving of Rs 1000 per month (10% of his current income) at the age of 25. He also increases his savings every year by 10%. First year, he saves Rs 12000. Second year, he saves Rs 13200.
The investment account generates a compounded annual return of 8%.
How much money can he be expected to get after forty years at the age of 65?
Not 10 Lacs.
Not 25 Lacs,
Not 50 Lacs
Not 1 Crore.
Correct answer is Rs 1, 47, 25,581.92
His habit of regular saving, along with the magic of compounding, makes this possible. He becomes a crorepati without winning a lottery. A chance of winning the lottery is almost zero. But the chance of becoming a crorepati by regular small savings along with compounding magic is 100%.
Most of the lottery winners cannot keep the winnings and stay rich, because they do not have the skill with money. But with the knowledge of compounding and savings habit you can win big and stay wealthy.
Everyone wants to become rich. But majority of them do not have any plan. They do not invest in knowledge and themselves to make this a possibility. They hope to win some lottery or receive an inheritance or depend on some external factor to make them rich.
But there is a simpler way that can make us and keep us rich. This comes from the magic of compounding. However, as my role model Mr. Jim Rohn says, “What is easy to do, is also easy not to do.” People ignore it because it is not very exciting. They lose patience as initial growth appears very small. However, as the compounding momentum kicks in the final years, savings grow at an unbelievable pace.
People fail to take advantage of this simple idea of compounding because we like to see instant results. The media trains us with their advertising that instant results are possible. Everyone wants instant money or success. They are not willing to work with simple stuff that works over time.
Trading systems can help us generate a much higher return than 8%. They help us compound our money without taking undue risks in the market. Learn to trade/invest on the basis of trading system plans. Once you have the skill in place and have the mental discipline to follow the system, you will be on your path to financial freedom.
Investing in knowledge is the best investment.
Knowledge used in practice to improve our life is wisdom. Otherwise it is a waste.
Trading/investing without knowledge is dangerous.
Join our stock market institute in Delhi for advanced level training program to acquire trading skills. You will learn our trading system and low-risk trading. You will be able to compound your savings effectively in systematic manner.
Here the List of Blogs in this Series
- What is Money Management?
- Following a trading system can make you rich more?
- Is your loss aversion costing a fortune?
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