The Story of Two Friends: Ramesh & Suresh
Ramesh and Suresh had been best friends since college. They started their careers at the same time, earned similar salaries, and had the same expenses. But when it came to investing, their approaches were completely different.
Suresh: “I’ll Start Investing Later”
Suresh always believed that investing was something he could do later. His focus was on enjoying life—weekend trips, gadgets, and dining out. “Once I start earning more, I’ll invest properly,” he told himself.
Years passed, and every time he thought about investing, he found a reason to delay. “The market is too high.” “I have expenses right now.” “Let’s wait for a better time.” By the time he turned 40, he had barely saved anything.
Ramesh: “Let’s Start Small, But Start Now”
Ramesh, on the other hand, took a different path. At 25, he started a Systematic Investment Plan (SIP) of just ₹5,000 per month in an equity mutual fund. He knew it wasn’t a big amount, but he believed in the power of compounding.
He understood one simple rule: Time matters more than the amount.
The Magic of Compounding
By the time Ramesh turned 40, his SIP had grown to ₹45 lakh, assuming an average annual return of 12%. He didn’t need to invest huge amounts—he just needed time for compounding to work.
Suresh, realizing his mistake, finally started investing at 40. He increased his SIP to ₹15,000 per month, hoping to catch up. But even with a larger investment, by the time both friends turned 60, their wealth looked very different:
- Ramesh (started at 25, investing ₹5,000/month): ₹5.5 crore
- Suresh (started at 40, investing ₹15,000/month): ₹2.0 crore
Even though Suresh invested more per month, he couldn’t match Ramesh’s wealth. The secret? Compounding rewards time more than money.
The Lesson: Time is Your Best Friend in Investing
Many people believe they need a huge amount to start investing. The truth is, starting early is more powerful than investing big.
The best time to start was yesterday. The second-best time is today.
Are You Ready to Start?
At DHM Finserv, we help investors start their SIP journey, no matter how small. Don’t wait for the “perfect time” to invest—start today and let compounding do its magic.
