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June 20, 2000

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Consolidating the savings

Earlier: Saving for your child's marriage

Rohit Sarin now concludes his series by telling you how much to save in order to achieve all the goals tackled earlier.

After having gone through each of the four financial goals separately, let us now see how much we need to save collectively to achieve all the goals simultaneously. To arrive at a consolidated figure we need to simply add up the monthly investment plans for the investor at different stage of life.

In the case of the 25-year old................................................

Year Sr. No. Equity Fund (Rs) Debt Fund (Rs) Total Yearly
2000 1 4,744 3,163 7,907 94,887
2001 2 5,219 3,480 8,698 104,375
2002 3 5,741 3,827 9,567 114,813
2003 4 6,315 4,210 10,525 126,293
2004 5 6,946 4,632 11,577 138,923
2005 6 7,641 5,094 12,735 152,815
2006 7 8,405 5,603 14,009 168,097
2007 8 9,245 6,163 15,408 184,896
2008 9 10,171 6,780 16,951 203,412
2009 10 11,187 7,458 18,645 223,740
2010 11 12,305 8,204 20,509 246,108
2011 12 13,536 9,024 22,560 270,720
2012 13 14,891 9,925 24,816 297,792
2013 14 16,379 10,919 27,298 327,576
2014 15 18,016 12,011 30,027 360,324
2015 16 4,896 3,263 8,159 97,908
2016 17 5,386 3,590 8,976 107,712
2017 18 5,923 3,950 9,873 118,476
2018 19 6,516 4,344 10,860 130,320
2019 20 7,168 4,778 11,946 143,352
2020 21 3,980 2,653 6,633 79,596
2021 22 4,378 2,918 7,296 87,552
2022 23 4,815 3,211 8,026 96,312
2023 24 5,297 3,531 8,828 105,936
2024 25 5,828 3,884 9,712 116,544
2025 26 6,410 4,273 10,683 128,196
2026 27 7,051 4,700 11,751 141,012
2027 28 7,756 5,170 12,926 155,112
2028 29 8,531 5,688 14,219 170,628
2029 30 9,384 6,256 15,640 187,680

In the case of the 30-year old................................................

Year Sr. No. Equity Fund (Rs) Debt Fund (Rs) Total Yearly
2000 1 7,596 7,596 15,191 182,293
2001 2 8,355 8,355 16,710 200,522
2002 3 9,192 9,192 18,380 220,575
2003 4 10,110 10,110 20,219 242,631
2004 5 11,121 11,121 22,242 266,895
2005 6 12,232 12,232 24,466 293,584
2006 7 13,455 13,455 26,912 322,943
2007 8 14,802 14,802 29,603 355,236
2008 9 16,283 16,283 32,563 390,756
2009 10 17,910 17,910 35,819 429,828
2010 11 6,177 6,177 12,351 148,212
2011 12 6,793 6,793 13,586 163,032
2012 13 7,473 7,473 14,944 179,328
2013 14 8,219 8,219 16,438 197,256
2014 15 9,042 9,042 18,083 216,996
2015 16 6,474 6,474 12,948 155,376
2016 17 7,121 7,121 14,242 170,904
2017 18 7,834 7,834 15,667 188,004
2018 19 8,617 8,617 17,233 206,796
2019 20 9,478 9,478 18,956 227,472
2020 21 10,426 10,426 20,852 250,224
2021 22 11,469 11,469 22,937 275,244
2022 23 12,616 12,616 25,231 302,772
2023 24 13,878 13,878 27,755 333,060
2024 25 15,265 15,265 30,529 366,348

In the case of the 35-year old.................................................

Year Sr. No. Equity Fund (Rs) Debt Fund (Rs) Total Yearly
2000 1 17,074 17,074 34,146 409,762
2001 2 18,781 18,781 37,561 450,738
2002 3 20,659 20,659 41,318 495,812
2003 4 22,725 22,725 45,450 545,392
2004 5 24,997 24,997 49,994 599,932
2005 6 8,050 8,050 16,100 193,196
2006 7 8,855 8,855 17,710 212,515
2007 8 9,741 9,741 19,481 233,772
2008 9 10,714 10,714 21,428 257,136
2009 10 11,787 11,787 23,572 282,864
2010 11 9,063 9,063 18,126 217,512
2011 12 9,970 9,970 19,939 239,268
2012 13 10,967 10,967 21,933 263,196
2013 14 12,064 12,064 24,127 289,524
2014 15 13,270 13,270 26,540 318,480
2015 16 14,597 14,597 29,193 350,316
2016 17 16,057 16,057 32,112 385,344
2017 18 17,663 17,663 35,324 423,888
2018 19 19,428 19,428 38,856 466,272
2019 20 21,371 21,371 42,742 512,904

Based on the above, let us now move a step further and compare the gross investment pattern across different age groups.

Year Age Annual Savings (Rs.)
    25 Year 30 Year 35 Year
2000 26 94,887    
2001 27 104,375    
2002 28 114,813    
2003 29 126,293    
2004 30 138,923    
2005 31 152,815 182,293  
2006 32 168,097 200,522  
2007 33 184,896 220,575  
2008 34 203,412 242,631  
2009 35 223,740 266,895  
2010 36 246,108 293,584 409,762
2011 37 270,720 322,943 450,738
2012 38 297,792 355,236 495,812
2013 39 327,576 390,756 545,392
2014 40 360,324 429,828 599,932
2015 41 97,980 148,212 193,196
2016 42 107,712 163,032 212,515
2017 43 118,476 179,328 233,772
2018 44 130,320 197,256 257,136
2019 45 143,352 216,996 282,864
2020 46 79,596 155,376 217,512
2021 47 87,552 170,904 239,268
2022 48 96,312 188,004 263,196
2023 49 105,936 206,796 289,524
2024 50 116,544 227,472 318,480
2025 51 128,196 250,224 350,316
2026 52 141,012 275,244 385,344
2027 53 155,112 302,772 423,888
2028 54 170,628 333,060 466,272
2029 55 187,680 366,348 512,904

The above analysis clearly points towards the following key conclusions:
  • Different investors have to invest different amounts at the same age depending upon the time /age when they started investing.
  • An investor who starts investing early in life has to invest much lesser to achieve similar financial goals at the same age through his/her investing life cycle.
  • The amount of incremental investment required to achieve similar financial goals increases over the investment period due to the impact of compounding.

Conclusion: "One should start regular investing as early as possible for any financial goal. This would help him to achieve the similar financial goal with lesser cost."

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