This is the story of 2 friends viz Amar and Rakesh. Both were from middle-income family backgrounds. Both joined same company at the same salary level of around Rs. 23,000 p.m.

We all have heard the story of a hare and tortoise wherein the hare was fast in the beginning and when he saw tortoise coming slowly behind him, he decided to have a nap. Meanwhile tortoise continued to move, surpassed the hare and won the race.


Here the story began somewhat similar. Amar, at the age of 21, started saving Rs. 5,000 p.m. (around 21% of his income) and invested in a diversified equity fund. He thought that once he gets married, then the savings might drop and might further drop when he decides to have kids.

Rakesh, on the other hand, thought that 21 is too early to even think about saving and investing. He decided to enjoy life as it comes.

At the age of 27, both of them got married. By this time, their income had become Rs. 50,000 p.m. Due to increase in income, Amar still continued his habit of investing Rs. 5,000 p.m. However, Rakesh still thought that he should be splurging money.

At the age of 30, both of them were blessed with a child each. Due to increased expenses, now Amar started to feel that may be he wont be able to save and invest much.

Rakesh’s wife was worried about Rakesh’s carefree attitude. She forced him to cut-down on some expenses and save at least Rs. 5,000 p.m. Rakesh agreed and at the age of 31, he started investing Rs. 5,000 p.m. for his retirement. For saving this amount, Rakesh and his family had to compromise a lot on their lifestyle.

So now we have a situation, wherein the hare (Amar) travelled a few miles (invested for few years) and slept (stopped investing).

Whereas the tortoise (Rakesh) has started to travel late but he didn’t stop after starting.

Lets fast forward and come to their finish line (retirement day). Now, both are 60 years old and want to retire.

You would have easily calculated that Amar’s total investment was Rs. 6 Lakhs whereas Rakesh’s total investment was Rs. 18 Lakhs.

Now, any guesses what would be their retirement amounts ?? Ok, this could be a tough one.

Lets make it simpler. Any guesses, whose retirement amount would be more ?? Remember Rakesh invested 3 times amount than that of Amar. So the natural choice would be Rakesh, right ?? Also, in the hare and tortoise story, the tortoise won. So here Rakesh is the tortoise. So might have won, right ?

If you guessed Rakesh, you are wrong. The correct answer is Amar.

Surprised ??

Lets look at their retirement amounts.

Amar accumulated a retirement amount of Rs . 3.53 Crores whereas Rakesh Could accumulate Rs. 1.62 Crores only. No doubt, even Rakesh was able to multiply his investments almost 9 times. But he could not match Amar who multiplied his investment 58 times.

But Rakesh invested more whereas Amar invested less. So what made him more wealthy ?

It was the magic of power of compounding during the additional time that Amar’s investments got. So if we were to draw analogy with the hare and tortoise story, the hare slept but his investments didn’t. Or we can say, that the hare slept after boarding on to a chauffer driven car. So while he slept, his journey continued.

Whereas Rakesh couldn’t compensate for not investing in initial years, even by investing 3 times amount.

Any Guesses, if Amar continued his investments from the age of 21 to the age of 60, what would be his retirement wealth be?? It would be Rs. 5.15 Crores. Doesn’t sound like too much, right ?? The point is his 68% retirement wealth was created from his investments in the first 10 years.

Lets say they had a 3rd friend Brijesh.  Brijesh started investing at the age of 41 and invests Rs. 10,000 p.m. What would be his retirement wealth? It would merely be 96 Lakhs.


The above story has a few learnings for all of us, especially the youngsters.

  1. The first 10 years of your career are the most important years to plan your retirement. If you observe, first 10 years of Amar could not be matched by the 30 years of Rakesh and 20 years of double investments of Brijesh. In fact, even if you add the retirement wealth of Rakesh and Brijesh, it will still be less than that of Amar. (Rs. 1.62 Cr + 96 Lakh < Rs. 3.53 Cr)
  1. Consumer goods companies will try to provoke you to spend more, to buy expensive gadgets on EMI. But you need to think, is it worth sacrificing for 30 years of your family life because you were unorganised for first 10 years ??
  1. Developed Countries like US had a culture of spending first and working later to repay the credit card bills. They also offered to take care of their retired population. But today, they are realising their mistake. Even they are encouraging their people to save and invest for their future.
  1. We Indians always have this culture of saving for the rainy day. Especially, when you are single, you don’t have too many mandatory expenses. This is the time you should look at saving at least 25-30% of your salary. Once you get married, the savings can drop to 10%. At times, that becomes difficult too.
  1. After having kids, your expenses shoot up. Thus, savings become even difficult. Then you might have to take tough decisions whether to buy new clothes for yourself or for the kid? Whether to change your car or pay the tuition fees of the kid?
  1. If you are at Amar’s stage, start saving and investing immediately. The additional time you have will give you a super-smooth journey to retirement. Don’t wait to become Rakesh.
  1. If you are at Rakesh’s stage, you are little late. But nevertheless, start early before you become Brijesh. You just have the right amount of time to plan your retirement.
  1. If you are at Brijesh’s stage, you are substantially late. You not only need to start urgently, but also need to shell out a larger amount for investment so that your retirement doesn’t suffer.
  1. If you have surpassed Brijesh’s stage as well, there’s very little you could do about it. But whatever you can do, its still worth doing. Also, there is a chance that your next generation is in Amar’s stage now. So at least become the guiding light for him.

We look forward to your valuable comments and feedback. Please feel free to contact us on if you have any questions.

(The views mentioned in the article are personal opinion of the author)








  1. I am 31 so in Rakesh stage. I have taken one policy annual premium Rs. 50,000. what should i do for good future amount ?

  2. Very good example to learn how important is investing in early stage of age
    I know this but not calculate the difference as you explain
    Thanks sir

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