How compounding can make you a millionaire: Start now, thank yourself later

Look, here is the thing: if you want to build serious wealth, you got to start now. Like, ASAP. The earlier you start investing, the more you are setting yourself up for serious gains later on. It's all about the magic of compounding. And guess what? Even a small amount of savings can grow into something huge if you give it enough time.

Think about it this way: you put away Rs 500-1,000 every month, and you will be surprised at how much that stacks up. Compounding takes your money, makes it grow, and then keeps investing the gains. Like a snowball rolling downhill—it just gets bigger and bigger.

The compounding part? That's earning interest on top of interest, not just on the original investment. It's like money getting buff without even hitting the gym.

Let us say you start with Rs 100, and it grows by 10 per cent every year. After a year, that is Rs 110. Another year, and you are at Rs 121. It is because in the second year, you will be getting interest on Rs 110, and not on Rs 100.

But Rs 100 is just a baby example. Let us talk about Mahima, who started investing Rs 10,000 a month when she turned 25. She kept it going for 25 years, which means she put in Rs 30 lakh total. But thanks to compounding at a 12 per cent rate per year, by age 50, she is sitting on a cool Rs 1.8 crore! That's some boss-level wealth.

Now, if Mahima's money grew with just simple interest (like where it doesn't add the interest to the principal), she'd only end up with Rs 75 lakh. So, compounding is the real GOAT here, taking her from Rs 75 lakh to Rs 1.8 crore! That is a massive difference, like going from a basic bike to a luxury car.

Starting small is cool, but starting early is even better. What if Mahima got lazy and waited 10 years to start? She would have to invest Rs 17,000 a month for 15 years to make up for it. Same investment, same rate, but by age 50, she only accumulates Rs 85 lakh. That is almost Rs 95 lakh less than if she would have started earlier. Ouch. Procrastination kills your cash.

Bottom line: Don't wait. Compounding is like having money superpowers. The longer you give it to work its magic, the bigger your stack. Get in early, stay consistent, and watch your bank account grow like crazy. Trust, you will thank yourself later.

Also read:
Over time compounding can make you very rich
The power of compounding