We have been discussing about where to invest and how you can go about with your salary allocation for savings.
I want to talk about consistency in investing today. It’s extremely important and it’s boring. When I first started investing for my retirement back when I was 24, I hated seeing a so much of my salary which I could have spent like my friends did in partying, go away right after salary day it was quite infuriating nonetheless. And I couldn’t see the results outright. Yeah, I come from the millennial generation of instant gratification.
I started off with PPF account as my retirement savings as right out of college when I ran a business and didn’t have a traditional job. For the first two years I couldn’t take advantage of the entire 1.5 lakh but still managed to save up half the limit. However, years going forward I’ve managed to top up the entire 1.5 lakh. And every year on March 31 I love seeing the hefty interest getting credited. The sweet sweet compound interest in works.
If you’re just starting to earn and manage to put in the entire 1.5L, here’s the breakdown of the final amount after the 15 year allowed with PPF.
| Year | start principal | start balance | interest | end balance | end principal |
| 1 | 0.00 | 0.00 | 0.00 | 150,000.00 | 150,000.00 |
| 2 | 150,000.00 | 150,000.00 | 11,250.01 | 311,250.00 | 300,000.00 |
| 3 | 300,000.00 | 311,250.00 | 23,343.75 | 484,593.75 | 450,000.00 |
| 4 | 450,000.00 | 484,593.75 | 36,344.52 | 670,938.28 | 600,000.00 |
| 5 | 600,000.00 | 670,938.28 | 50,320.36 | 871,258.65 | 750,000.00 |
| 6 | 750,000.00 | 871,258.65 | 65,344.41 | 1,086,603.05 | 900,000.00 |
| 7 | 900,000.00 | 1,086,603.05 | 81,495.23 | 1,318,098.28 | 1,050,000.00 |
| 8 | 1,050,000.00 | 1,318,098.28 | 98,857.39 | 1,566,955.65 | 1,200,000.00 |
| 9 | 1,200,000.00 | 1,566,955.65 | 117,521.68 | 1,834,477.32 | 1,350,000.00 |
| 10 | 1,350,000.00 | 1,834,477.32 | 137,585.81 | 2,122,063.12 | 1,500,000.00 |
| 11 | 1,500,000.00 | 2,122,063.12 | 159,154.73 | 2,431,217.86 | 1,650,000.00 |
| 12 | 1,650,000.00 | 2,431,217.86 | 182,341.35 | 2,763,559.20 | 1,800,000.00 |
| 13 | 1,800,000.00 | 2,763,559.20 | 207,266.93 | 3,120,826.14 | 1,950,000.00 |
| 14 | 1,950,000.00 | 3,120,826.14 | 234,061.96 | 3,504,888.10 | 2,100,000.00 |
| 15 | 2,100,000.00 | 3,504,888.10 | 262,866.59 | 3,917,754.71 | 2,250,000.00 |
You see that interest over the years? I love to see those numbers increasing year after year. And if you plot the growth on a graph, you’ll realize that while there’s a steady increase in your end principal the growth in end balance is exponential.
I love making such projections, it helps me to keep myself motivated and achieve my goals.