Ramesh: You know, Sweta, most of the investors I meet in their 40s or older start getting really serious about their investments. But people in their early 30s don’t seem as concerned about retirement. They think they have plenty of time to deal with it later.

Sweta: Yeah, I’ve noticed that too. When you’re in your 30s, retirement feels so far away. It’s easy to think you’ve got years before you need to start worrying about it.

Ramesh: Exactly! But that’s one of the biggest mistakes people make. They underestimate the power of compounding. Just imagine if they realized that investing as little as ₹117 per day at age 30 could make them a Crorepati by the time they retire at 60.

Sweta: Wait, seriously? Just ₹117 a day? That doesn’t sound like much at all!

Ramesh: It really isn’t. But the numbers get staggering if you wait. If you start at 40, you’d need to invest ₹381 per day, and if you wait until 50, that jumps to ₹1,522 per day to reach that same ₹1 crore goal.

Sweta: Wow, that’s a huge difference! It really shows how much time plays a critical role in growing your money.

Ramesh: Exactly. The earlier you start, the easier it is. But when people come to me in their early 40s with no savings, it becomes a much more serious conversation. There’s still hope, but the approach has to be more aggressive.

Sweta: What would you recommend for someone in their 40s with no savings?

Ramesh: If they want to retire comfortably in the next 20 years, they need to take some drastic steps. First, they should start investing half their salary in equity mutual funds immediately. No delays.

Sweta: Half their salary? That’s a big commitment.

Ramesh: It is, but it’s necessary at that stage. Let’s take a family of three, with monthly expenses of ₹50,000 and a post-tax salary of ₹1,00,000. If we assume inflation at 6% for the next 20 years and mutual fund returns at 11% annually, they could accumulate around ₹4.67 crores by the time they’re 60.

Sweta: So, this plan could still work for someone starting in their 40s?

Ramesh: Yes, but it’s not easy. It requires a lot of discipline.

Sweta: For those in their 30s, though, the power of compounding can work wonders. They’d only need to invest around 25-28% of their income each month, compared to someone starting at 40, who’d need to invest 50% of their salary.

Ramesh: Exactly, it all comes down to how much of your income you can set aside and how disciplined you are in maintaining that.

Sweta: So, essentially, the earlier you start, the less painful it is, and the more flexibility you have.

Ramesh: Precisely. Time is your greatest asset when it comes to investing. If more people in their 30s understood that, they’d have a much smoother path to retirement.