Why one should invest in the Stock Market?
Before we address the above question, let us understand 2 different scenarios:
Scenario 1
Let us assume that
Your monthly Income is Rs 40,000/–
Your Monthly expenses are Rs 25,000/-
With this Income and expense level, You will end up saving Rs 15,000/– per month
Now we take certain assumptions here:
1) Your annual salary increases by 10% year on year and your annual expenses grow by 7%
year on year.
2) Your current age is 30 and you want to retire at 50.
3) Your expenses are fixed and you don’t wish to work after retirement.
4) The Savings are retained in the form of cash.
Going with these assumptions that’s how your cash balance would look like after 20
years of hard work.
Years
Annual Income
Annual Expense
Cash Left
1
₹4,80,000
₹3,00,000
₹1,80,000
2
₹5,28,000
₹3,21,000
₹2,07,000
3
₹5,80,800
₹3,43,470
₹2,37,330
5
₹7,02,768
₹3,93,239
₹3,09,529
6
₹7,73,045
₹4,20,766
₹3,52,279
7
₹8,50,349
₹4,50,219
₹4,00,130
8
₹9,35,384
₹4,81,734
₹4,53,650
9
₹5,15,456
₹5,13,467
₹5,51,538
₹5,80,277
₹5,90,145
₹6,54,851
₹6,31,456
₹7,38,040
₹6,75,657
₹8,30,788
₹7,22,954
₹9,34,137
₹7,73,560
₹10,49,239
₹8,85,649
₹13,19,938
₹9,47,645
₹14,78,501
₹16,54,781
₹18,50,678
Total Savings
