(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at: finplancoach@gmail.com)
Time is money or Money is time?
"Time is money says the proverb, but turn it around and you get an interesting truth. Money is time"
Yes. Money is time.... Making money or not making money is decided by the time factor. Let's see how time plays the role of a benefactor and a punisher. Because the power of compounding is @ work very very silently.
Time Mantras for Money:
Mantra 1 - Time ripens Money:
Consider this classic example:
100 shares of INFOSYS issued in the IPO in 1993 valued at Rs 9,500 would have become 12,800 shares valued at a whopping Rs 4.15 crore as on March 31, 2011. This is an astounding annual compounded growth rate of 59 %, with a total gain of 464,422 %. Money too follows the law of nature; it ripens over the period of time.Power of compounding is @ work very very silently......Mantra 2 - Time multiplies money:
Time can multiply the money multifold.... Take a look @ this example:
Three friends aged 50 review their investment strategy.
A started investing @ 30 years with one lac @ 15% returns. B started investing @ 35 years with one lac @ 15% returns. C started investing @ 40 years with one lac @ 15% returns.
Take a look @ the result; you will be amazed...@ 50 years
@ A would have got Rs 16,36,900
@ B would have got Rs 8,13,800
@ C would have got Rs 4,04,600
With identical investment and returns, A got 4 times more of C and 2 times more of B. And the difference in time is about 10 years and 5 years respectively.
The time made all the difference...
Mantra 3 - Time rewards planners:
It's very true that we are all busy with our work and careers. But it's important that we spend some time to make our financial plan. Time surely rewards the planners. In the previous example, we saw A starting @ 30 years, B @ 35 years and C @ 40 years. Just by planning early, A got 4 times of C and 2 times of B... That is the reward Time gives the people who plan well.
Mantra 4 - Time punishes procrastinators:
While Time rewards the planners, Time is also ruthless in punishing the procrastinators. In the above example, C makes 4 times lesser than A and B makes 2 times lesser than A. The difference is huge and massive considering the fact that the investment amount and the returns are identical for all the three. But the difference here is the TIME.
That's why I said Time is ruthless in punishing the procrastinators.
Mantra 5 - In all, money is time:
We have demonstrated examples to show Money is indeed Time... Money is best managed if started early; time can be highly beneficial for early starters. Time can also be ruthless in punishing the procrastinators. That's why Money is Time because the power of compounding is @ work very very silently.
Call the experts @ Money Avenues to make time work for you and for your money's advantage.
(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at: finplancoach@gmail.com)
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