The Power of Compounding: How to Turn ₹10k into ₹1 Crore

Compound interest is often referred to as the eighth wonder of the world, and for good reason. It is the principle that allows your money to grow exponentially over time, not just on your principal investment, but on the accumulated interest as well.

Why Starting Early Matters

The single most important factor in compounding is time. The earlier you start, the more time your money has to grow. For example, investing ₹10,000 monthly at age 25 yields significantly more at retirement than starting the same amount at age 35, even if the total amount invested is the same.

The Rule of 72

A simple way to estimate how long it takes to double your money is the Rule of 72. Divide 72 by your annual rate of return to get the number of years. At a 12% return, your money doubles every 6 years!

Key Takeaways

• Start investing as early as possible to maximize time.
• Be consistent with your contributions.
• Reinvest your returns to fuel the compounding engine.
• Patience is key; the biggest growth happens in later years.