“Just like the snowball becomes big as it rolls down the mountain slope, Investments grow in value with time”
Have you ever seen a snowball grow bigger as it rolls downhill? Similarly, in the realm of finance, there exists a phenomenon equally awe-inspiring – the power of compounding. This magical force has the potential to turn even modest investments into substantial wealth over time.
In this illustration we have taken the example of blue-chip funds as they are considered safer compared to mid-cap, and small-cap equity funds.
Imagine this scenario: You decide to invest ₹10,000 every month in Franklin India Bluechip Fund. Now, let’s see forward and see how your investment would grow over the years.
In 10 Years:
After a decade of making regular monthly investments of 10,000, your money would have grown substantially. For instance, an initial investment of 12 lakh rupees would typically increase to around 23.2 lakh rupees. This remarkable growth is due to the power of compounding, which multiplies your monthly investment, resulting in significant returns over time.
In 20 Years:
Fast forward another decade, and the power of compounding continues to work its magic. For example, an investment of 24 lakh rupees would typically increase to around 1.07 crores. Your disciplined approach to investing has paid off, leading to substantial growth in your wealth over the years. The snowball effect of compounding has transformed your monthly investments into a substantial nest egg for the future.
In 30 Years:
Now, let’s take a glimpse into the future three decades later. The power of compounding has worked wonders for your investments, providing financial security and stability for the years ahead. For instance, an investment of 35 lakh rupees has grown to more than 10.93 crore rupees which is remarkable.
Just like the snowball gains momentum as it rolls down the mountain slope, your investments have grown in value over time, thanks to the power of compounding. By staying committed to your investment plan and harnessing the power of compounding, you can pave the way for a financially secure future.