In India, turning 25 is more than just another birthday — it’s a turning point. While career progression and lifestyle goals take centre stage, there’s one critical aspect that often gets sidelined — building a strong financial foundation. At 25, you’re at a sweet spot: you’ve likely started earning, and time is still on your side. This makes it the perfect age to make a strategic one-time investment that can snowball into a substantial corpus by the time you retire.
When it comes to building wealth, time is the most powerful asset. The earlier you start investing, the more time your money has to grow through the power of compounding. Compounding essentially means earning returns not only on your initial investment but also on the returns that accumulate over time. The longer your money stays invested, the more it grows.
Starting with a lump sum investment and allowing it to grow at an average rate of return can result in a massive increase in value over the years. Even small investments, if made early, can turn into significant sums by the time you retire.
Imagine making a one-time investment of ₹5 lakh on your 25th birthday and leaving it to grow at an average rate of return of 12% annualised. At first glance, ₹5 lakh may seem like a modest amount, but the results can be truly astonishing over the long term.
Let’s break it down:
If you leave this investment untouched and allow it to compound over 35 years, the final value of the investment would be ₹2,63,99,809.79 (2.64 Crores)
The key takeaway from this example is that the earlier you begin, the greater the potential for your money to grow. By investing at a young age, you give your wealth plenty of time to grow, which results in a significantly larger corpus at the time of retirement.
The most important aspect here is the rate of return. A steady return of 12% annually, which can be expected from a mix of equity-based investments, mutual funds, and other growth assets, can make a big difference. By investing in a balanced portfolio and allowing it to grow, you can set yourself up for a financially secure future.
By making smart decisions, such as investing early, you could secure a substantial corpus for your retirement. Even a one-time investment of ₹5 lakh, when given enough time and compounding, can turn into a wealth-building tool that could significantly improve your quality of life post-retirement.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 26, 2025, 3:31 PM IST
Team Angel One
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