The Magic of Compounding: Start Investing Early

Starting your investment early is important because of the power of compounding. Compound interest is the interest added to an investment's initial capital and interest that accrued over prior periods. Compound interest can increase profits and wealth over the long run. The earlier you start investing, the more time your money has to grow and the more risks you can take without affecting your long-term goals.

Starting early allows investors to take more risks and have an opportunity to earn better returns since they can recover from wrong decisions without affecting the long-term financial goals. Investing early can give you a big advantage. You can not only plan your investments but also give them enough time to grow into a corpus that meets your financial goals. 

Data: Mutual Fund tools

In above illustration you will find that investment amounts are same of all. The horizon is different.

Important Takeaway: Why starting your SIP early is important.

•  If you start your SIP early, you can avoid the cost of delay.
•  Starting early is most important for your financial planning needs.
•  The above illustrations explain the power of Compounding Returns.

Disclaimer: We have gathered all the data, information, statistics from the sources believed to be highly reliable and true. All necessary precautions have been taken to avoid any error, lapse or insufficiency; however, no representations or warranties are made (express or implied) as to the reliability, accuracy or completeness of such information. We cannot be held liable for any loss arising directly or indirectly from the use of, or any action taken in on, any information appearing herein. The user is advised to verify the contents of the report independently. Returns less than 1 year are in absolute (%) and greater than 1 year are compounded annualized (CAGR %). SIP returns are shown in XIRR (%). The Risk Level of any of the schemes must always be commensurate with the risk profile, investment objective or financial goals of the investor concerned. Mutual Fund Distributors (MFDs) or Registered Investment Advisors (RIAs) should assess the risk profile and investment needs of individual investors into consideration and make scheme(s) or asset allocation recommendations accordingly. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in the future. Investors should always invest according to their risk profile and consult with their mutual fund distributors or financial advisor before investing.