Your life savings are infl uenced by your ability to strike a balance between spending and investing. If you learn that skill at an early age, you may end up creating wealth for yourself and your family.
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Delayed spending, at times, is spending wisely
Published On , 15 Jan 2019 By TOI
The lifestyle that millennials lead, at times prompt the older generation to think that the former are inclined more towards consuming and less towards saving and investing. To some extent this is true. Millennials could, however, use some smart tools which could allow them to enjoy the same lifestyle, buy the same consumables but with a delay. And if they agree to tow that path, in the process save some money in the short run. And inculcate a habit of discipline in saving and investing.
Here's one example how a millennial, aspiring to buy a smartphone for Rs.12,000, could opt for one of the two options.
OPTION 1: BUY IT AS AND WHEN HE/SHE DECIDES TO ON AN EMI AT SAY 15% ANNUAL RATE OF INTEREST.
The monthly outgo would be nearly Rs.1,100 for a year, translating to a total outgo of almost Rs.13,000
OPTION 2: TO LET GO OFF SOME SMALL CONSUMABLES, SAY SACRIFICE A COFFEE EACH WEEK AND A MOVIE A MONTH
This could translate to a monthly saving of Rs.1,000
Invest this Rs.1,000 in a liquid scheme of a mutual fund house
Say the fund generates an annual return of 6.5%
After a year, total corpus would be a little over Rs.12,400
This leads to a savings of nearly Rs 1,000 compared to buying the smartphone on EMIs
There's an additional savings of Rs 400 as the liquid scheme corpus grew to Rs.12,400
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