Even after less investment, you can get many times more returns, starting early will give more benefits
The Power of Compounding Mutual funds can be one of the most effective methods of wealth creation in terms of investment.
TPN24 Desk 
If you want to accumulate more wealth with less investment, then you can do so with the power of compounding interest. Scientist Albert Einstein has called it the eighth wonder of the world. According to him, those who understand the power of compounding make money from it and those who don't, pay. The Power of Compounding Mutual funds can be one of the most effective methods of wealth creation in terms of investment.
Let us understand this with an example: Suppose you have invested Rs 100 in a scheme and you get Rs 5 as compound interest i.e. compound interest. Now in the next compounding cycle, the return will be calculated at Rs 105 instead of Rs 100 i.e. you will get interested in the amount of Rs 105. Your wealth increases qualitatively through compounding. However, compounding requires time and patience.
Investment of two persons equal, but different returns For
retirement planning a person named A starts investing Rs 2000 per month from the age of 30 years. On the other hand, a person named B starts investing Rs 4000 per month from the age of 45. Both the individuals invest till the age of 60 years. Suppose both got a return of 10%. Now let us see how much corpus he must have accumulated.
Note: Inflation is not taken into account for calculation. Assuming the rate of interest is constant, A and B are investing in the same scheme throughout the investment tenure.
Increase SIP Amount As your income increases, increase the SIP amount accordingly. By doing this the compounding return will also increase and your goals will be achieved easily. The second important thing is to continue investing through SIP for a long time. Do not stop SIP till the goal is achieved. This will have two advantages. Year after year the investment amount will increase and the compounding returns will also increase.
