Can Stock Market Change your Life? | How to be a Millionaire through Stock Market?

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Changing Lives through Stock Market

If you dream to be financially independent at the age of 40 or 50 and enjoy the rest of your life, then the Stock market is the way that can fulfill your dream. Frankly, the Stock market is the only way where you can also earn money while sleeping.

The Stock Market teaches you the actual power of Compounding, Compounding is a very simple concept and anyone can easily understand it. But there are very few people who have used compounding to its fullest capability.

This simple concept has given many billionaires to the world, one of them is Warren Buffett who is the Third Richest Man in the World with a Net Worth of $73.50 Billion.

Warren Buffett

The best way of understanding any concept is by experiencing it or doing it, and the Second best way is seeing the examples of that method. I cannot provide you the experience but I can provide you some impressive examples of it.

So imagine that you are earning a sum of Rs. 30,000 INR monthly, which makes your Annual income about Rs. 3,60,000 INR. Now I assume that you will save Rs. 4150 INR every month which will make Rs. 50,000 as your Annual savings and assume that for good work you have been promoted after 5 years of your job and now you can save Rs. 4600 INR monthly and this will make your Annual earnings about 55,000 and now also assume that after another 5 years you got promoted again and now you are investing Rs. 5000 INR which will make your Annual investment of total Rs. 60,000 INR and now you don't get promoted and you continue this much of saving amount for the next 10 years straight. So now you have invested monthly Rs 4150 INR for 5 years plus monthly Rs. 4600 INR for the next 5 years and again monthly Rs. 5000 INR for the next 10 years, which makes your investment time period of 20 years.

Learn how Elon Musk's Life changed through Tesla stock Click here

#Now you can see this entire journey in the chart below

Years	Yearly Savings (INR)	Cash Balance (INR)
1	50000	50000
2	50000	100000
3	50000	150000
4	50000	200000
5	50000	250000
6	55000	305000
7	55000	360000
8	55000	415000
9	55000	470000
10	55000	525000
11	60000	585000
12	60000	645000
13	60000	705000
14	60000	765000
15	60000	825000
16	60000	885000
17	60000	945000
18	60000	1005000
19	60000	1065000
20	60000	1125000

As you have seen after saving every year with this dedication you are getting only Rs. 11,25,000 INR and this is the total amount which you have saved in 20 years and you will not be that satisfied after saving this much amount for 20 years. Even the inflation increases by 2% every year which means you are losing money if you are saving it with you, and if you save in your bank, then the banks would give you a return of 3% every year which means you will beat the inflation by just 1% and that 1% will also be gone through the taxes and charges of banks.

But if you have invested your money in the stock market, then these conditions will be directly opposite to the above-mentioned chart.

Now imagine that the same amount instead of saving in your bank or any other means you started investing that amount in the Stock Market, so the average returns of stock market per year are almost over 20% if you choose well-established companies which means you will get 20% your amount back every year you invest and the inflation is only 2% every year which means you will earn a huge of 18% every year, but imagine that you got only 15% returns then do you think that it will be enough? 

Come on, lets check out in the chart mentioned below.

Years	Yearly Savings (INR)	Compounded Balance (INR)
1	50000	50000
2	50000	107500
3	50000	173625
4	50000	249668
5	50000	337119
6	55000	442686
7	55000	564089
8	55000	675498
9	55000	831822
10	55000	1011596
11	60000	1223335
12	60000	1466835
13	60000	1748861
14	60000	2068890
15	60000	2439223
16	60000	2865107
17	60000	3354873
18	60000	3918103
19	60000	4565819
20	60000	5310692

Now you have seen the Power of Compounding in the above chart which makes your amount 4x times that you have invested. This can change anyone's life after 20 years. Now you can notice that the difference between the 19th and 20th year is around 7 lakhs which means your amount has increased 7 lakh that year even you have only invested just 60,000 more in your invested amount. Now you can see compounding can give you astonishing returns only if you have patience in your mind. 

Now suppose you extended your investment period from 20 years to 21 years then from the 20th year to the 21st year your earnings through compounding will be increased by around 8 lakh INR as you can see in the chart mentioned below.

Years	Yearly Savings (INR)	Compounded Balance (INR)
20	60000	5310692
21	60000	6167296

And Similarly if you continued this to the 25th year then the total amount you will get will be over 1.10 Crores by investing only Rs. 14.25 lakhs in 25 years. This method of compounding can easily make anyone a Millionaire for sure. This makes the Moral of the blog that "Investing is very important to gain financial freedom".

Then even if you are investing only Rs. 2000 INR every month you will get around more than Rs.50 lakhs after 25 years of time.

Thank you for giving your time and reading my blog till the end. I hope that you have understood what is compounding and how it will help you in your Investing Journey.

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