Almost all of us have had a piggy bank when we were kids – Diligently and very excitedly putting in 50paise or 1 rupee coins along with the occasional 10 rupee note scored on special occasions.
Do you remember the joy of hearing the coins jingle and feeling it grow heavier each month and wondering how much money you had saved up ? And when you broke it open after a couple of months or a year, it used to be a heady happy feeling.
Unfortunately, the age of innocence seems to fly by and we grow up and get caught up in our lives.
Now that you have a job and are earning and saving money, are you still using a piggy bank to save money ?
Let’s take an example:
Suppose you had put away Rs 100 everyday in a piggy bank over the last 10 years and forgot about it. If you broke open that bank today, it will have Rs 3,65,000. It would be a pleasant surprise but not the best way to save your money.
Inflation would have destroyed a lot of the value of your wealth. (See https://finqa.in/what-is-inflation/ )
Unfortunately, a lot of adults seem to saving their money in a piggy bank – It’s just instead of a clay piggy bank, they now do so by leaving their money in a savings bank account. Or a Fixed Desposit.
If you had instead started a SIP of Rs 3000 per month, over the last 10 years it would have grown to anywhere between Rs 8.5 lakhs to 11 lakhs depending on the fund you had chosen to invest in.
Yes, It’s possible to significantly grow your money by investing in a planned manner and meet your goals. Don’t just leave it in the bank.