How to go from Rs. 35 to Rs. 35,00,000?

Subject line caught your eye? Well, it*s true. We did the math and you can actually make Rs. 35,00,000 from Rs. 35, and it’s easy!

But before we tell you how, let’s look at all things we spend around Rs. 35 on

– a packet of chips, an auto ride home, maybe a couple of cigarettes, that extra cup of coffee, or even a bar of chocolate. Guilty pleasure or necessity, ask  yourself if you can forego any of these small expenses for a day, to the tune of just Rs. 35. Can you? It’s not a big deal, is it?

If you do forego one or some of these, you can easily save Rs. 35 a day, and if you do this every day, this can help you in a big way! How? Keep reading.

By saving Rs. 35 every day, you will end up saving Rs. 1,050 a month, which  adds to Rs.12,600 in a year. In about 277 years, you’ll have saved Rs. 35,00,000, which obviously is of no use to you then. But what if you could make Rs. 35,00,000 in 30 years, saving the same Rs. 35 a day? A far cry from           277 years, isn’t it?

Now, Rs. 35 on its own doesn’t earn any interest, and to make Rs. 35,00,000, it will take long. The trick is to speed up its growth, by investing it wisely. With your money earning an interest, or in our case, returns, it can easily make that much in a shorter period of time.

We compared what happens to Rs.1050 (rounded off to the nearest 1000) invested every month through a systematic investment plan (SIP) in equity mutual funds, to how it would grow in a savings account. See for yourself.

Rs. 1000 invested in a good equity mutual fund, is likely to garner a return of around 12% per annum. That compounded over a period of 30 years, brings your total investment value to Rs. 35,29,914. The same money in your savings bank account would have earned only 4% per annum, and given you just Rs. 6,96,363.

Your SIP in equity mutual funds, would have made over Rs. 28,00,000 more.

Now let’s consider an even better scenario:

What if you saved Rs. 35 every day in the first year, Rs. 45 every day in the second year and increased your savings by Rs. 10 a day for a year, until the 29th year? The results are incredible!

At the end of 30 years, your savings bank account at 4% gives you Rs. 30,76,662, but an equity mutual fund at 12% gives you close to Rs. 1 crore (Rs. 97,61,271 to be precise)! That’s three times more than your savings account!

Rs. 35 a day is a small sum, but it can pave the way for bigger dreams in the future. The power of compounding and systematic investing can be a game changer in your financial plans. Start a SIP in equity mutual funds and make it count.