Why Invest timely and wisely

If I invest 100 rs for 10,20,30,35 years in Sensex, large mid and small caps, FD, gold, ppf, saving account. Please adjust to 6 percent inflation. Make a table.

Assumed Nominal Returns:

1. Large Cap fund: 12% per annum
2. Mid Cap Funds: 14% per annum
3. Small Cap Funds: 16% per annum
4. Fixed Deposit (FD): 7% per annum
5. Gold: 8% per annum
6. PPF: 7.5% per annum
7. Savings Account: 4% per annum

Inflation-Adjusted Values of ₹100 Investment Over Time (in ₹)

Asset Class	10 Years	20 Years	30 Years	34 Years	35 Years	CAGR (Inflation-Adjusted)
Large Cap Funds	₹179	₹321	₹575	₹748	₹797	5.66%
Mid Cap Funds	₹216	₹466	₹1,005	₹1,336	₹1,417	7.55%
Small Cap Funds	₹256	₹675	₹1,780	₹2,381	₹2,611	9.43%
Fixed Deposit (FD)	₹109	₹119	₹130	₹133	₹134	1.07%
Gold	₹132	₹174	₹228	₹253	₹263	2.06%
PPF	₹111	₹125	₹141	₹147	₹149	1.34%
Savings Account	₹67	₹45	₹30	₹26	₹24	-1.27%

Key Insights:

1. Equities (Sensex, Mid Cap, and Small Cap) show strong inflation-adjusted growth over the long term, with small-cap stocks leading due to higher risk and return.
2. Small Cap Funds outperform with a CAGR of 9.43%, followed by Mid Cap Funds at 7.55%, and Sensex at 5.66%.
3. Fixed-income assets (like FD and PPF) struggle to keep up with inflation, yielding only minor growth (around 1% real returns).
4. Gold performs modestly, offering protection against inflation with a CAGR of 2.06%.
5. Savings Account significantly underperforms after inflation adjustment, with a negative real return of -1.27% over time, indicating a loss of purchasing power.

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