How To Discover Your True Saving Potential

A good start is to put every rupee earned into two separate bank accounts – one for regular expenses and the other for investments.

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Mr Sharma was waiting at the cafeteria eagerly for his mutual fund agent. He had promised his children a movie in the evening and was getting late. In a few minutes the agent walked in and soon they were discussing the various investment options. Sharma said, “I want to plan for my children’s higher education. How much should I invest for that?”

The agent, with an important look on his face, opened an Excel template, put in some values and said, “You have to start an SIP of ₹25,000 per month. Then in 10 years, assuming 12 per cent per annum return, it will become ₹56 lakh.” Sharma said after a deep thought, “A commitment of ₹25,000 looks difficult, let’s start with ₹15,000.”

Does this kind of conversation sound familiar? The agent knew that he had to draw a big enough line upfront, so that even if the customer settles for a lesser amount, gives him a sizeable business! He is happy, Sharma is also happy. He can now take his children to the movie with the feel-good factor of having started a ‘forcible saving’ for the children’s future. He knows for sure that investment works only this way. One has to force oneself into it, while ensuring that one is not over committed.