I am sharing some basic calculations of making investments . Suppose we invest X amount of money at rate of interest 8, 10, 12 , 14, 16 and 18 percent . The time period of investments be 20,25, 30, 32,34,36, 40,45 years. Lets see how many times the money should multiply in the table below
Now lets adjust these values with inflation at 6 percent to see how much will the actual value of money be increasing
These calculations are done through chat gpt so some variation can be possible.
Some important lessons to learn from these calculations
- Invest early : You can see how much variation is possible which year passing year. You can simply visualise difference in your money invested for 34 years and 35 years. That can help you draw a comparison.
- Balanced portfolio : If you invest all your money if safe investments like PPF you can understand you will get little benefit keeping in mind inflation. Too risky investment can give good returns but are risky. Diverse your portfolio. Invest money in PPF/ SIP/ Bonds/ Gold-ETF . On a long run we should try to get 10-12 percent returns on our investments to multiply wealth.
Lets assume we are investing 30000 rupees per month. Now lets actually see how much will this small investment become at time of maturity.
Without Inflation adjustment
With Inflation adjustment at 6 percent
Happy Investing