Amazing Investment Strategy! How to turn Rs.1000 into Rs 1 Crore in 30 Years

You may think this is some sort of scam, or another of those ads out there trying to grab your attention. However this isn’t anything like that. What I am about to tell you is an investment strategy that is surely going to boost your retirement fund like no other strategy can.

Well the recipe is simple for any one to cook this retirement kitty. All you need is the ability to invest Rs. 1000 every week, an asset that promises 10.50% return, a lot of will power and a small dose of perseverance.

The Power of Compounding

I know you are killing your self with curiosity by now. So don’t go overboard with this. The strategy is nothing but compounding.

For beginners compounding means (according to Investopedia) the ability of an asset to generate earnings, which are then reinvested in order to generate more earnings.

That means, every earning from an asset is re-invested back in to the asset itself so that the final earning will be compounded.

So how does one work with compounding?

If  I just add up Rs. 1000 every week for 30 years I would end up with only Rs. 15.60 lakhs (1000 *52* 30 = 15,60,000) and certainly not with the Rs. 1 crore I promised. Now how am I supposed to come up with the rest of Rs. 84.40 lakhs?

Suppose that I change my investment strategy a bit and decides to reinvest my earnings back into the asset. Then we can see the magic taking place. My investment increases every year and the returns increase exponentially!

Compounding Explained with an Example

I will explain it with an example. Imagine you are investing Rs. 52000 every year (or Rs. 1000 / week) in an income generating asset which gives you 10.50% per annum.

Now after the first year your returns will be Rs. 5460. Suppose you reinvest this amount next year then the total amount you can invest is Rs. 52000+ Rs. 5460 = Rs. 57460.

You add this Rs. 57460 to the second year’s investment of Rs. 52000. Now you have a corpus of Rs. 109460. This amount is invested in the same asset giving you 10.50% yearly return.

Therefore at the end of that year you have earned Rs. 11493. Now for the next year you have an amount of Rs. 109460 + Rs. 11493 = Rs. 120953 to invest.

Likewise every year your corpus grows and every year you reinvest it making your investment snowball into a huge amount.

With a table I will show you how your money multiplies through compounding in 30 years.

Table Showing How Your Money Will Grow in 30 Years

Please note that for ease of explanation I used an annual return model. The returns would be better if we calculated the values on a month-by-month basis.

Now who wouldn’t want to retire with Rs. 1 Crore in bank deposits? Well, now that you know how to do it, start investing as soon as possible. It is very clear that if you start investing by compounding from an early age you will end up with a huge amount at the time you retire.

Now go and use the power of compounding to your advantage!

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