The Piggy Way

THE PIGGY WAY

Grant a wish to a person on what he wants the most in life. In a split second you will get the reply “MONEY”. Yes Money indeed is the Ruler! It is one of the most important factors in everybody’s life. Gone are the days of Hundi and Pigmies. It’s the generation of Bull and Bear Markets. The whole world counts on money. Now how do we make money? How to understand the Rocket Science of “MONEY?” Do we need to take advice from people like Bill Gates and Warren Buffet and start big infrastructure companies? Or do we need to harass the technical skills of the Developers in Silicon City to compete Microsoft?

A Little attention on this issue will unveil the solution to the ever present problem for want of Money. Are we heading towards a financial management seminar??? No my friends. We are just trying to understand a simple solution to the so called complex antic of satisfying our monetary requirements for the days to come ahead.

Ah. I know what you people are thinking now!! One more junk of philosophical dosage? Ok let us come to the point. Now what is this article all about? A small incident would make us understand better. The outcome was a revelation!

Mr. Karthik, a hard working article drawing a stipend of Rs 1, 20,000 was engrossed in the thoughts of making his future monetarily secure. He was poor in understanding the science of investing money and he feared to invest huge amount in markets or stocks. As a result the entire stipend was lying idle in his bank account. One fine day Mr. Jitendra Kumar who happened to be an enthusiastic wise Investor and good friend of Karthik met him. A general conversation began and in the course of the conversation Mr. Karthik expressed his myths and fears of investing money in stock market.

Karthik: Hey Jeetu, I have a hell lot of dreams and plans for my future. But I am wondering as to how I can crystallize those dreams? I want to lead a life of satisfaction and peace. How will I ever be a millionaire with the earnings I have now? I should have millions to satisfy all my dreams.

Jeetu:   Oh Bro, that’s so simple!! I have an idea.

Karthik:  Jeetu, you don’t have an idea of my castles in the sky.

Jeetu:  Tell me do u maintain a Hundi or a piggy bank? If yes, then build more castles in the sky no problem.

Karthik:  Jeetu Bhai, Don’t Joke please. I am very serious. And I really want to be free of monetary hassles. Yes I do maintain a piggy bank at my home.

Jeetu:  Hey No Karthik, I am damn serious. How much do you put in the piggy bank?

Karthik:  Hmm..  I guess some six hundred rupees a month.

Jeetu: Ok, You mean to say you are ready to save Rs 20 per day. Fine, give those six hundred rupees at the end of every month to me say for 25 years. I will construct your castles.

Karthik:  Jeetu Bhai, I am planning for my future and not yours!!

Jeetu:  Hey bro, trust me. I will see through that your monetary aims are met. Just do as I say. Give me Rs 20 a day for 25 years i.e. 300 months and leave the rest to me.

Karthik:  What are you up to my dear friend? How will I realize my future monetary requirements by saving Rs 20 a day for 300 months? I expressed my thoughts to you hoping I would get a good suggestion. But you are confusing me more than ever. Please make your intentions clear Jeetu.

Jeetu:  Hey, Trust me for once. I can prove you with the help of a simple mathematical calculation and logical thinking how Rs 20 saved a day for 25 years can make you sit back at home and relax.

 Wondering as to how this can happen?? My friends, it’s a simple investment strategy. No hi funda concepts are involved. As we all know, the present economy of India is growing stronger. New industries are coming up day by day and more foreign currency is being pumped up in Indian capital and money markets. And in a developing country like India, where the market performance is reaching a new scale day by day, more and more prospective investors will pump money in the market. The market analysts have given a very optimistic view about the performance of Indian Stock Markets in the days to come ahead. A little knowledge of how the Stock market functions will make the understanding more clear. In very simple terms the index of stock market represents the health of our economy. Now this index doesn’t represent just the performance of one company or few companies. It is the average of performance of all the companies listed under the Stock Exchange. Now don’t come to a conclusion that I am provoking you to invest in Stock and Shares and do speculative trading. No I am not. Rather I am suggesting you to invest in Mutual Funds. Investment in Mutual Funds has twofold benefit. Firstly your investments are diversified to minimize risk, and if the market in general does well, your investment too does well. Secondly you don’t have to master the intricacies of market strategies and analysis. Mutual Fund takes care of where to invest, how much to invest and when to invest as a team of people having expertise in investment decisions handle your funds. You would be astonished to see how a meager investment of Rs 20 per day saved for 25 years on a continuous basis i.e. for 300 months will fetch you in return. Have a look at the table below:

Scheme	Rate of Return	Total Amount invested for 25 years	Total Value after 25 years
SB Account	3.50%	1,82,500	2,94,286
Recurring Deposit	5.75%	1,82,500	4,08,925
FD Investment	7.50%	1,82,500	5,33,456
PF	8.00%	1,82,500	5,76,367
MIP	13.02%	1,82,500	12,87,926
Equity Tax Saver – MF	27.95%	1,82,500	1,58,04,484
Equity – MF	26.37%	1,82,500	1,21,17,490
Equity Mid Cap – MF	29.59%	1,82,500	2,07,97,310

* The above analysis is done considering the best funds of various fund houses and from their performance since inception.

*The above analysis is done considering the Growth option while investing in Mutual Funds.

* The results of Dividend option may differ in returns compared to the above given figures.

* Assumed the amount invested is not withdrawn for 25 years.

Aren’t you flabbergasted by the above chart?? Yes friends, small investment on a daily basis can work wonders. There is always a misconception associated with the word investment, “huge”. No investment need not be huge every time. It can be as small as Rs 20 a day for a reasonably long term depending on your future monetary aims. Rs 20 per day?? Seems u can definitely invest right? And a small investment doesn’t land you in bankruptcy even if the Stock market crashes drastically!!!! Come on we can cut down on pizza huts, a round of smoke, and a visit to purple haze once in a week to achieve this. So why don’t you start investing right now to face the uncertain future without any hassles. Who knows in the future even” OXYGEN” may cost you!! So Invest…..