How Much are You Really Worth?

Consider a monthly salary of Rs 10,000 per month. Over a 30-year period this salary will mean a total earning of Rs.36 lacs. If this entire salary could be invested at 10% per annum (rate of return) at the end of every month during this period, this will mean a sum of Rs 2 Crores 23 Lacs 70 Thousands at the end of 30 years. Check the following table to find out results for different periods and different rates of return:

Rs10,000 Per Month Will Become		At 10% Per annum		At 9% Per annum		At 8% Per annum		At 7% Per annum
		Rs Lacs		Rs Lacs		Rs Lacs		Rs Lacs
After:
30 Yrs		223.70		182.58		149.73		123.42
25 Yrs		131.77		112.12		95.74		82.07
20 Yrs		75.67		66.96		59.41		52.85
15 Yrs		41.43		38.03		34.96		32.20

The above data give you an idea about the size of your salary cake for the rest of your working life. Creating a fortune would begin with holding on to biggest possible slice out of this salary cake...

For example, a person holding on to 10% of his salary of Rs 10,000 per month for 25 years will have managed to create Rs 11.21 lacs at 9% per annum, a sum relatively immense for somebody earning only Rs 1.20 lacs per annum...

This is true at every salary level and at any rate of return on account of regularity and time value benefits...

Salary earners get known amount of earning at known dates. House and consumer durable purchases are financed through EMIs (equated monthly instalments) of loan repayments by utilising this known income stream to make these purchases affordable...

You have to use the same power of salary to build your wealth, and the result will obviously be a miracle...

The Truth About Your Money Now

Let us try to find out the quantum of real gain/loss in value of your money with reference to a 8.5% annual rate of inflation that we should normally plan against. A sum of Rs 1,00,000 will be worth the following amounts after the periods mentioned in column 1 at various rates of returns as indicated in the following table:

After :	At 10%	At 9%	At 8%	At 7%
10 years	1,14,717	1,04,705	95,486	87,004
15 years	1,22,869	1,07,140	93,306	81,154
20 years	1,31,601	1,09,631	91,176	75,697
25 years	1,40,953	1,12,181	89,094	70,608
30 years	1,50,969	1,14,790	87,060	65,860

**(Tax Effect Not Considered)
Thus, if you are earning a rate of return lower than the rate of inflation, you will not be actually growing your money... Similarly, the more the actual growth rate of your money is above or below the inflation rate, the faster your real money will grow or deplete, not proportionately...
Read the above sentence again. Try to fully understand what we are trying to say. This information is of immense import and most of us are totally unaware of this...