By Nivesh Gyan 26 JuneCategory: Uncategorized
Most of the times, we observe a very casual approach to managing personal finances. People with lot of wealth are often too busy to worry about it. Another tendency is to focus on earning more, rather than managing accumulated wealth. This works fine until the earning continues. However, since habits are difficult to change, once earnings stop of decline, it becomes difficult to manage the accumulated wealth and can lead to serious trouble, as highlighted by Boris Becker case recently.
This underscores need for any earning person to put equal focus on managing savings and investments. The income that savings generate also contributes to building wealth. Over long period, the return on investments can lead to significant difference in value of wealth.
Here is an illustration of how overall wealth gets impacted due to difference in returns on investments:
Monthly SIP of Rs. 10,000
|Indicative Returns||Amount after 15 years|
Whether you end up poor or rich while you retire will depend on how much you saved and what you earned on your savings vs how much you exactly earned. If you earn a lot, but don’t save at all or don’t invest your savings properly, then you could retire poor and vice versa.