Power of Small Savings – Investment series 1

In my last article, I wrote on two key challenges, we as Robo-advisors face; i.e. “Customer mind-set” towards investments, where it comes as last priority and “Meaning of investments”, where quality is not understood.

To sum it up… how do you motivate customers?

Unlike e-commerce portals, based on current theme, it’s the deep discount that attracts. We have cases (many); where customer go to malls or retail outlet on look & feel, and finally will swap on their smart phone to check on availability & discount, and punch the order… which is obvious, where?

While talking to one of my relative today on investments, who is 42 years old;
I don’t have savings,
I don’t understand investments,
We have invested in real estate & we pay big EMI.

Same story, when I ended with a young 22 years old;
I will start once I will become stable,
I don’t have savings now.

Both the cases, I didn’t explain financial planning or gave any Gyan, all I did was question them.

Question: If you start investing 5k (my relative)/ 2k (young chap), on a monthly basis till your 60th birthday, what do you think it will be worth?

They were speechless… after sometime they calculated, (my guess) no of years left for 60th birthday, multiplied by 12 months, multiplied by monthly investment of 5k/ 2k and looking at double the figure.

They answered: 11lacs & 10lacs… hopefully to double it.
I am sure, most of us will do it in the same manner.

Now I gave them two scenarios, one the regular or traditional way i.e. Banks FD/ Post office and second thru equity Mutual Funds, and explained what their investments will be worth on their 60th birthday:
FD vs Mutual FundsThey are again speechless, in shock & now don’t know what to do… to believe me & start? or wait for second opinion?
As no one, till date, has explained this simple calculation, with this simple amount, which will also not pinch them.

Just imagine, if this young chap starts with just Rs.500/- monthly & maintains this discipline for next 38 years, his investments will be worth 87lacs with equity MF.

I wish, if someone (family, friend or any advisor), would have pushed me when I passed out in 1998. But sad part is that, which I still remember, there was only a credit card chap standing outside my campus. 😉

Therefore, at Moneyfrog.in we are building a culture of knowledge & understanding with small savings first. We don’t sell investments but convenience, where we let customer experience their financial data & it’s working based on easy to use analytical tools thru our Mobile app & Web application. We have even designed our annual subscription packs based on customer’s profile & requirements, such that they find value in each packaging.

Manoj Chahar
Founder & Storyteller at Moneyfrog.in
Manoj is the founder of Moneyfrog.in, with 15 years of corporate experience & expertise in financial markets. Manoj has corporate stints with Kotak Securities, IIFL group & Philips India. He holds an MBA (PGDM) degree from Symbiosis (SIMS) Pune.
His interests include birding & adventure activities.

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