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 A Young man and a retired man were neighbours. They both loved gardening. The young man always wanted his garden to look better than the old man’s garden. Once they both planted identical saplings in their garden. The young man used to give a lot of water and manure to the plants while the old man used to give just little water and a small amount of manure. The young man’s plant grew into a beautiful green, leafy plant whereas the old man’s plant looked very ordinary. One night, it rained very heavily and the young man’s plant which grew big was uprooted whereas the old man’s plant was unharmed. The Young man was shocked and asked the old man for the reason. The old man replied, “You had supplied everything that a plant would need but in abundance. The plant did not have to search for it because of which the roots did not have to go deep down into the soil. But, I was supplying just enough to keep it alive and for the rest of its needs, the roots had to go deep down into the soil. That’s why your plant was not able to hold on when it rained heavily. Nurturing plants is a slow process, there are no shortcuts.”

Investing too is not about the amount of money we invest but the amount of time we invest. It is a slow process which can test our patience. The longer you invest, better is the power of compounding. Three friends started investing Rs.5000, Rs.10,000, Rs.20,000 per month via SIPs from age 25, 35, 45 till age 60 respectively (see table). They also stepped up their SIP by 10% pa. Assuming a return of 12% pa, their corpus at age 60 was ~Rs.8 cr, ~Rs.4 cr and Rs.1.65 cr. One who started with a small amount but gave more time, had a larger corpus than those who invested more initially but gave less time. Less is more in investing too.

 Note: The returns are indicative and for illustration purpose only. It shall not be construed as actual returns and may not be achieved.