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Investing Basics · 3 min read

The power of compounding — why starting early beats investing more

Two investors, the same total amount, a 15-year difference in outcome. Compounding rewards time more than effort.

Compounding means your returns start earning returns. In the early years the effect is invisible; in the later years it dominates everything else.

Consider two investors. Aarav invests ₹5,000 a month from age 25 to 35 and then stops. Bhavesh starts at 35 and invests ₹5,000 every month until 60. At 12% annual return, Aarav — who invested for only 10 years — ends up with a comparable or larger corpus at 60 despite investing far less.

What this means in practice

The most valuable input in your financial plan is not the fund you pick — it is the number of years you stay invested. Start with whatever amount you can sustain, automate it, and increase it every time your income rises.

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