The school has reopened and a seminar is held for all the students. It is about the ‘Value of Money’. You and your friend decide to attend the seminar.

After a formal introduction, the facilitator began: “Both started together – one much faster than the other…yet the slower one won! It’s a familiar story, right? The story of the Hare and the Tortoise is one that all of us have heard, but is it really true? Let’s look at a new and interesting angle to this story..”

“I would like to invite 2 volunteers to the stage.”, the facilitator said.

You and your best friend volunteer. Both of you are 12 years old. He asked both of you to assume that you get Rs. 1000 as pocket money each month. Then he asked both of you to decide how you would spend that money:

The facilitator suggested that your friend is like the hare, and you are like the tortoise, because he intends to save, if possible, while you are slow and steady and intend to save on a consistent basis. He suggested that both of you could increase your savings as and when your pocket money would increase. In fact, he asked both of you to commit to saving at least 10% of your monthly income once you start earning. He said that if you develop this habit of saving from childhood, it will become easier for you to save money in the long run.

Now, lets talk figures. On an average if you started saving from age 15 to 35, that’s 20 yrs and received interest on it, what do you think that your total savings would be by the time you turn 40 years old? I’d say, that your savings would be more than a whopping Rs. 50 lakhs! The magic of compounding would play a major role here. This means that you earn interest on the amount that you invest, plus you earn interest on the interest that you earned earlier.

So, you did this by saving Rs. 200 a month and your friend thought that there is plenty of time and that he would take it easy and save a huge amount whenever possible. He will have a reason for not saving money every month, and you will save a small amount every month and accumulate a lot of money. But there is a risk here. What if you wake up late, just like the hare? What if you are already 40 years old and then start saving? Will you taste the same success as the tortoise who made small, steady progress? If you’re late, you lose the race of financial well-being.

So, who are you? The hare? Or the tortoise? The story is true and is asking you to ACT now..Start saving bit by bit and stay wealthy and wise!!

Author: Mr. Nirmal M Jain | Mr. Nirmal M Jain is a Co-Founder at HappyWise Financial Services. He has helped over 100 Families over the last 15 years of his services in the Financial Planning Sector. He has been a mentor to several people to help them better understand investments, stocks, mutual funds, financial planning, personal finance and above all his favourite term “The Power Of Compounding!”.

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