Why should you plan your investments long term?⏰

 

When we plan for the future, we mostly focus on two steps - identifying a destination and a plan to reach there. But between the two are many equally important steps.

It’s the same when it comes to our financial future. Effective financial planning includes a step by step approach to meet our life goals and aspirations. It also manages risk protection for us and our dependents along with income, expenses and investments control. However, what mostly we miss out is envisioning a longer time horizon to realise true potential of all planning.

Why to have a long term perspective?

Let's observe some pointers:

  • Remember our school mathematics formula for amount calculation:
    Amount = Principal * (1+ Return) ^ Time.
    Time is the exponential function and that has the largest impact on the final investing outcome.
  • In the scenario of equity investing, a long term duration reduces the chance of us losing money and improves the chance of us achieving an inflation-beating return
  • And, not to forget the power of compounding. Below image shows the growth potential of a Rs. 25,000 monthly SIP over various durations - 5 years, 10 years, 15 years & 20 years, driven by a 12% annual return.
compounding

So, clearly, TIME is the essence. While we may not know all that you want in life, we understand the 3 most important things you need on your investing journey - Growth, stability, and risk minimisation.

Sahjik Finserv helps you achieve these with effective financial planning.

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