But those are the exact three words that can help you retire with Rs 40 a day. Let me show you exactly how. Say you can set aside Rs 40 every day for your retirement. Where do you get Rs 40 a day? Why not cut down on those cigarettes? Then, let's see what could happen.
Let's also make some assumptions (do allow for the fact that all may not be valid). Let's also suppose that these are valid for the next 30 years.
| Instrument | Yield (%pa) |
| PPF | 8 |
| Sensex | 18 |
| Equity | 21 |
Retirement Chart
| Money saved per day | Rs 40 | Rs 80 | Rs120 |
| Money saved per year | Rs 14,600 | Rs 29,200 | Rs 43,800 |
| Money earned if invested over the next 30 years | |||
| Sensex | Rs 11,547,841 | Rs 23,095,681 | Rs 34,643,522 |
| Equity | Rs 21,099,200 | Rs 42,198,399 | Rs 63,297,599 |
| PPF | Rs 16,53,935 | Rs 33,07,870 | Rs 49,61,805 |
Nice chunk of change, eh?! Doesn't that make your retirement look so comfortable?
Of course, if you spend Rs 120 per day on cigarettes, you probably won't live for 30 years!
Ah, now you are saying you don't smoke? Maybe you're a frequent restaurant-hopper? That would easily mean Rs 2,000 per week. Keep at it for 30 years and you would have said goodbye to Rs 15 crore. Think of the holidays you could have afforded with that kind of moolah!
Gastronome's chart
| Money spent per day | Rs 750 | Rs 1,500 | Rs 2,000 |
| Money spent per year | Rs 39,000 | Rs 78,000 | Rs 104,000 |
| Money earned if invested over the next 30 years | |||
| Sensex | Rs 30,846,972 | Rs 61,693,943 | Rs 82,258,591 |
| Equity | Rs 56,360,876 | Rs 112,721,752 | Rs 150,295,669 |
| PPF | Rs 44,18,045 | Rs 88,36,090 | Rs 11,781,454 |
Don't fit into the smoker or the gastronome's category? But you have one weakness -- you love shopping. Say, you spend about Rs 10,000 per month on retail therapy.
Hmm. Over 30 years, a Rs 10,000 investment in an equity fund could fetch you Rs 17 crore. I won't even go into what you can do with that kind of money!
| Money spent per day | Rs 3,500 | Rs 5,000 | Rs 10,000 |
| Money spent per year | Rs 42,000 | Rs 60,000 | Rs 120,000 |
| Money earned if invested over the next 30 years | |||
| Sensex | Rs 33,219,816 | Rs 47,456,879 | Rs 94,913,759 |
| Equity | Rs 60,696,328 | Rs 86,709,040 | Rs 173,418,080 |
| PPF | Rs 47,57,895 | Rs 67,96,993 | Rs 13,593,985 |
Why do you think the otherwise smart, educated people fail to understand this? Allow me to tell you what I think.
Your life is a function of your habits, not common sense. It's tough to change your habits. Consider this. Most smokers know the damage that 54,750 cigarettes can do to their health. But that 'one' cigarette never seems to matter. Ditto for that 'just one' cold drink of Coke or chocolate.
Most people don't care about small numbers and wait for that big amount to come by for them to save. Funny thing is, if I tell you saving money is very simple and needs very simple methods to make large amounts of money, most people, including you would laugh at me. But it's just so easy. Start small. Start simple. Save big! They need complicated tools such as day trading, brokerage accounts, futures and options, etc.
When you tell them that they can make a lot of money by just being disciplined they will just not believe it!
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