If you do not know already - which I doubt as you are super kids! :) - Lamborghini is an exotic supercar.
Look at this awesome pics - who wouldn't want to own this awesome car ? But wait, how much does this cost ?
It costs 200,000 US dollars ($) or 1 crore Indian rupees (₨) to buy a Lamborghini :)
Where does a kid at age 12 bring that kind of cash ? You are correct; and let me tell you that even for a 30 year old adult it is hard to come up with that kind of cash to buy a car.
Now, here is a secret from me for your Lamborghini buying plan -
If you saved the same 300$ or 15,000 ₨ every month in a bank account.
And let's assume the bank pays you 10% yearly interest then at the end of the same 19 year period (on your 31st birthday) you will receive 202,800$ or 1,01,40,234 ₨
Which means, now you can buy your dream car. I know :) it is a a little longer wait but to achieve anything important you need patience and planning.
As you notice you make almost 3 times (68,400$ versus 202,800$) the money by putting money in bank versus in piggy bank. "Compound interest" is the magic behind getting this additional money. I will explain the details of compound interest in a separate post unless you already know and explain it to me :)
So are you ready to start saving ? No, I mean Investing :)
Look at this awesome pics - who wouldn't want to own this awesome car ? But wait, how much does this cost ?
It costs 200,000 US dollars ($) or 1 crore Indian rupees (₨) to buy a Lamborghini :)
Where does a kid at age 12 bring that kind of cash ? You are correct; and let me tell you that even for a 30 year old adult it is hard to come up with that kind of cash to buy a car.
Now, here is a secret from me for your Lamborghini buying plan -
- Decide your goal - which you have decided that you want to buy a Lamborghini on your 31st birthday
- Plan - Now you know how much a Lamborghini costs and how much time you have - 19 years
- Start saving - Your goal is to save a fixed amount "every month" which you can cut from your expenses like shoes, food, clothes :), until you start earning on your own.
- Invest your saving - Now this is the most import piece of the puzzle. Do not put your saving in a piggy bank but I want you to invest this money - for example in a bank account. Let me explain.
Piggy Bank -
If you saved, 300 $ or 15,000 ₨ every month
In a Year, your piggy bank balance will go up by 3600 $ or 1,80,000 ₨
At the end of 19 years (at age 31), your piggy bank balance will be = 68,400 $ or 34,20,000 ₨
You see, you are way short on your 200,000 $ 1 crore ₨ goal.
Now, let me show you the magic of investing
Fixed deposit account in a bank -
If you saved the same 300$ or 15,000 ₨ every month in a bank account.
And let's assume the bank pays you 10% yearly interest then at the end of the same 19 year period (on your 31st birthday) you will receive 202,800$ or 1,01,40,234 ₨
Which means, now you can buy your dream car. I know :) it is a a little longer wait but to achieve anything important you need patience and planning.
As you notice you make almost 3 times (68,400$ versus 202,800$) the money by putting money in bank versus in piggy bank. "Compound interest" is the magic behind getting this additional money. I will explain the details of compound interest in a separate post unless you already know and explain it to me :)
So are you ready to start saving ? No, I mean Investing :)
ATUL KAKA THE CHARLIE CHAPLIN VIEDOS WERE REALLY EPIC.
ReplyDeleteTHE TIP YOU GAVE ABOUT BUYING A LAMBORGHINI WAS REALLY GOOD.WILL USE IT.
:) Have you seen any charlie chaplin movie ? Watch it, they are very funny.
ReplyDeleteBTW - Have you learnt percentages in school ? If yes, then you already have foundation to understand "interest" and "compound interest".