It can be easy to overlook the importance of saving your long term goals, especially when you’re focused on shorter-term financial priorities such as buying a new car. However, it’s crucial to consider your long-term financial security and make saving for your long term goal a priority.
If you start early and save regularly, even small sums can grow into significant savings. Additional money you save today may have years – or even decades – to grow before you need it for retirement. I would like to quote an example of one of my friend who also happens to be my client. A friend of mine had taken 30 lakhs loan for 9.6 % interest rate. I did suggest him to refinance the loan at 8.5%. But given all the paper work and visit to multiple banks he was reluctant to go through all the formalities for the saving of 1%. Finally I was able to convince him and the net savings added him Rs 3000 per month.
A SIP of Rs 3,000 every month for a 20-year investment period helps me earn Rs 30,00,000, assuming 12% annual returns. Hence, it is important for every one of us to understand how small money decisions make a huge impact in the long run. Every financial decision is crucial, be it small or big. And thorough financial planning would help us realize our priorities and the value of making right investments to meet our dedicated goals.