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When Is The Best Time To Invest?

When Is The Best Time To Invest?

‘Investing is about TIME in the market and not TIMING the market’ – Warren Buffet

It is a different kind of pleasure to see your invested corpus grow over time. It is like having a second income under your belt.

Having already discussed the ‘Where’ to invest in the earlier blog, it is about time we deliberate on the ‘When’.

More than the ‘Where’ it is the ‘When’ that matters.

Sadly, Investors are curious to know the best fund to invest in rather than stressing on the best time to invest.

So, let’s get straight to the agenda of the topic, when is the best time to Invest?

I have some good news and some bad ones as well.

Shall start with the bad one first as I firmly believe the ending has to be good.

The sad news is that the best time to Invest was ‘Yesterday’.

Yesterday is history and therefore shall not delve much on it. Let’s get straight to the next point.

The good news is that the next best time to invest is ‘NOW’.

Begin and see the magic a couple of years down the line.

So, that’s it. This concludes the blog.

That was too Short and too Sweet.

Till next week….

Ummmm…..

Oh!!!! It just struck me.  There is more value I can add to this.

What I am about to show you now is earth-shaking stuff.

You shall be amazed to see the numbers.

The AlchemyThe Alchemy

‘Compound Interest is the eighth wonder of the world. He who understands it, earns it….He who doesn’t, pays it.’ – Albert Einstein

Let us get Bunty and Babli into the frame who are best of friends.

Both of them start earning at the age of 25 years.

However, Babli being the wiser of the 2 decides to invest ₹10k per Annum. She does this till she retires at age 60 years.

However, Bunty who is lackadaisical in his approach and spends what he earns. This happens till he turns 30 when Babli manages to instill some sense in him.

He acknowledges his mistake and does a course correction. Starting at 30, he resolves to invest ₹10k per Annum till he retires at age 60.

In effect, Babli stays invested for a period of 35 years and Bunty for 30 years.

Assuming the rate of return that both get is 15% annualized. Here is what they end up with.

The Magic

Age in YearsBabliBuntyDifference
Corpus at 25₹11.5K₹11.5K
Corpus at 35₹2.8 Lacs₹1L₹1.79 Lacs
Corpus at 40₹6.4 Lacs₹2.8 Lacs₹3.6 Lacs
Corpus at 45₹13.66 Lacs₹6.4 Lacs₹7.25 Lacs
Corpus at 50₹28.25 Lacs₹13.66 Lacs₹14.59 Lacs
Corpus at 55₹57.61 Lacs₹28.25 Lacs₹29.35 Lacs
Corpus at 60₹1.166 Crs.₹57.61 Lacs₹59.03 Lacs
Total Invested₹3.5 Lacs₹3 Lacs₹50k
When Is The Best Time To Invest?
Formula usedFV(Rate,NPER,PMT,PV,Type)
FVFuture Value
RateRate of Return
NPERNo. of Periods
PMTPayment
PVPresent Value
When Is The Best Time To Invest?

There you have it before you.

The gap in time of investment between both is only 5 years as Bunty started 5 year later than Babli and the difference in total amount invested is only ₹50k.

However, the power of compounding works magic with passage of time and the gap in Corpus between the 2 widens as time passes. At retirement, the corpus left with Babli is more than twice that of Bunty.

The Denouement

‘Save to Invest. Don’t save to save. The only reason to save money is to Invest it.’ – Grant Cardone

I have no doubt in my mind that like me you want to be rich and financially sound.

It doesn’t matter what age you find yourself at this juncture. Just Invest.

If you are at 20, Voila!!!! You are at a sweet spot. Go for the kill.

If you are at 30, you can be wealthy.

If you are at 40, you can be financially sound.

If you are at 50, you can still afford to invest in Equities albeit a small percentage.

I hope the figures shown above have left you enchanted.

I hope my attempt to convince you into investing has paid a rich dividend.

I would Love to see you rich.

Till then, Happy Investing.

Gain more insights from other blog: The Power of 1%

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