There comes a day when crores of salaried employees who just started their jobs receive their salary . Majority of them keep on saying to themselves that they ” I will start investing when my salary increases to a certain amount ” . At that point of time it might look logical or pragmatic to because you may think that since investment would eat a big chunk of your salary then you may not have any money left to spend on other necessities .

This story that we are going to read today is about two people who are in the same company , having the same salary . One of them chose to stop waiting for higher salary to start investing whereas the other person kept believing that waiting for a higher income would before starting investing would be much better .

You might find this story relatable , so read it till end to find out why waiting for a salary hike is detrimental for your investment whereas choosing not to wait for higher salary to start investing would eventually enjoy a more relaxed life post retirement and would be ready for any emergency in his life .

Chapter 1 – Time Beats Money – Compounding Rewards the Years You Stay Invested

It was the first day after payday .

The office environment was brighter than usual . People were busy making their weekend plan . On one table in the cafeteria , sat newly joined graduates Amit and Rahul . Both earned ₹25,000 in hand per month ,both coming from a typical middle class Indian family and they even had similar dreams for themselves .

“Bhai , how much did you get ? i got ₹25,000 .” Amit asked Rahul

“Bro , we joined the same company at same time for the same position so please yaar ” Rahul replied

“What are you going to do with it ?” Rahul asked

“I already started a ₹2000 SIP ” Amit replied

“What ? you are barely going to make anything out of a meagre ₹2000 SIP” Rahul said

“So what are you going to do ?” Amit asked

“I will start investing once i get a higher salary .” Rahul replied

Amit didn’t reply , he just moved on and took a sip of tea .

Author’s Note

Compounding doesn’t reward the biggest investor but the earliest one . Starting with ₹2000 SIP would not feel impressive to many , but over time when it compounds it becomes a foundation stone for your investment goal . It would be more effective than an investment that starts after a 5 – year delay because the earlier investments that Amit made would stay invested for longer .

Chapter 2 -Lifestyle Inflation Is Real

One year later after the appraisals, Amit and Rahul received their first salary with increment. They both received same increment . Rahul was so happy that he decided to shift to a better apartment and got himself a new phone on an EMI ,Weekend trips and parties also got upgraded . Soon after paying these off , he was barely left with any money . Rahul postponed his investment to next year .

“I promise , i will start investing from next year ” Rahul said to himself

Whereas Amit contained his lifestyle inflation to a limit and increased his SIP from ₹2,000 to ₹2,500 .

Author’s Note

This is called lifestyle inflation . You have a tendency to fund your lifestyle upgradation with the salary hike . So instead of funding your luxury wants , you should grab this opportunity to level up your investments first , allowing your wealth to grow along with your salary .

Also check out : 7 Lifestyle Inflation Related Mistakes Every Middle Class Indian Should Avoid

Chapter 3 – Starting early builds investing habits

Both were sitting at a table sipping coffee , Amit mentioned that he increased SIP to ₹2,500 along with the increment he got in the salary .

“I think i told you in the past too , do you really think ₹2,500 a month is going to change your life .” Personally , as far as i am concerned SIP of ₹10,000 to ₹15,000 would be very good for wealth building. ” Rahul said

“Whatever my investment may be yielding but its definitely greater than zero and the other thing is that SIP has made me more disciplined in the investment aspect . This discipline will help me in future , so that i would prioritize investment over anything ” . Amit replied

Author’s Note

People tend to underestimate the importance of discipline in the field of investment . At one point of life , Rahul may begin his investment career by investing ₹10,000 per month . But his investing career would not take off easily because he lacked discipline . Discipline doesn’t come with the amount it comes with time . The amount of years you stayed in the game inculcates discipline . In this case Amit is having better investment discipline than Rahul .

Chapter 4 -You Lose the Most Valuable Years

Five years go by .

“I have started investing ₹15,000 monthly from today , i will soon catch up to you .” Rahul said

“You may catch up to me , but you may never catch up the years you wasted keeping your money idle and uninvested not allowing it to compound .” Amit replied

Rahul went pin drop silent . He regretted his decision but could not accept his mistake in front of Amit .

Author’s Note

You can somehow recover lost income but cannot recover lost time . You may easily double your investment in future but you can not bring back those lost 5 years to compound your initial capital . This is why investing early is very important than what most beginners realize.

Chapter 5 -Your Biggest Enemy Was Never Your Salary it was your excuses

That evening Rahul could not stop thinking about his investment decisions over the past five years . To begin with something , he had blamed his starting salary for everything .

“I will begin investing once my salary increases .”

” I need to upgrade my rental home , investment can wait for one more year .”

“I will begin with my next appraisal .”

Soon Rahul realized it was not his salary , his own excuses were the real enemy . His salary changed , along with it his excuses also changed . He lost time while searching for the right time .

Author’s Note

People often think a mere SIP of ₹500 cannot help them build wealth . This is because they compare their investment with the outside world where a person is investing ₹5000 per month . They don’t realize that , the same would have started with ₹500 SIP at some point in his life to reach at this stage .

Time waits for none , especially not for one who constantly makes excuses . You can’t just skip steps to reach the final goal at your own convenience , you have to take small strides and let it compound naturally .

Chapter 6 -Salary Hikes Aren’t Guaranteed

A Few weeks later , a mail popped up in everyone’s inbox

“Due to economic slow down , we may not be able to provide hikes to your salary this FY.”

Everyone was disappointed and silence enveloped the entire office .

Rahul was stunned , he had just begun his investment journey which was completely dependent on this salary hike which was not even guaranteed .

Amit was left unaffected because his SIP amount was going to get automatically deducted from his account regardless of the news . Due to his past experience in investing he had built resistance to such news , he knew how to handle such events without deviating from his investing journey .

Rahul finally accepted the truth and understood the difference between his and Amit’s mindset .

Author’s Note

Tying your investment goal to an assumption you think is going to happen in future is not being hopeful it means being outright stupid . Investment is not done with the help of the future but it is done to reshape your future . Only assumption you can make for the future is the worst case scenario , don’t expect your future to help you . Separating your investment from uncertainty will make your wealth resilient .

Chapter 7 – The Best Time to Invest Is When You Have an Income

The next month , Rahul sat down jotting down his expenses in his journal .

After paying off the rent of his fancy house , bike EMI , phone EMI and setting aside a small fund for his emergency fund , he found out he could invest ₹2,000 .

He had a smirk on his face reading that amount .

He finally got to know what Amit had practiced all along . He understood that you don’t need a “perfect” salary to begin investing , you just need a salary to invest .

A SMS showing ₹2,000 deducted for this month’s SIP came on his phone . Rahul smiled .

For the first time , he didn’t wait for the right time to make wealth .

He had finally started it .

Author’s Note

Investing never begins from an increment , bonus , incentive or promotion. It starts from the moment you set aside a certain amount from your existing income , no matter how small it is . Your commitment towards investment is not shown through the amount of money you keep for the fund , but it is measured by the decision to stop waiting .