Skip to main content

KICK YOUR JOB AFTER 40

                       ADVT:  HOME PROJECTOR IN AMAZON


     How human population or bacteria population grows?  Two may become four. Four may become eight and so on.  Here the offspring gives rise to more offsprings.

    How the nuclear bomb explodes?  One nuclear fission becomes two due to ejected neutrons.  Two becomes four fissions and so on.  This chain reaction is left uncontrolled then it results in a huge explosion.  Here fission causes fission.  How the plant and tree grow?  From seed, stem shoot out.  Then it branches out.  Next, it clads with leaves.  More leaves, more photosynthesis.  Then it yields flowers, fruits, etc.  Here, we observe the rapid growth of plant cells.

    Why do not we learn from nature?  Why do not we use the money to make money?  Why do not we use the interest to get more interest?  That is compound interest, the magic. In compound interest, money grows rapidly towards the end.

                "Compound interest is the addition of interest to the principal sum or in other words, interest on interest".


    If you follow the following saving methods, you may kick your job at the age of 45 or even you may retire.
   1. Open a suitable account like a national pension scheme,  recurring deposit, mutual fund, etc.  Assume your age is 30.  The account should be live for 15 years.
2. Deposit 20000 every month in the first year.  Let us assume that the interest is compounded every three months.
3. In the second year deposit 22k every month.  In the third year -24k go on up to 15 years.
4. At the end of the 15th year.  You are likely to get around one crore. You will be earning more than 35 lakhs as interest. 

   At the age of 45, you can boldly venture into (passion) business with one crore as the capital or you can deposit the one crore in the bank and live off using the monthly interest.

      Here the interest is taken as 6%.  This amount should not be touched at any cost.  Self-discipline is the most important.

THE FORMULA
A= P(1+r/n)^nt
A= amount
P= principle
r= rate of interest
n- number of times interest is compounded per year.
t- the number of years.
Also
P=A/(1+r/n)^nt
t= ln(A/P)/n(ln(1+r/n)

    With these formulae, you can design your savings plan.  I have given only guidelines.  But the sky is the limit.  Use online calculators.

Footnote;  Einstein said "compound interest is the eighth wonder"
2. Nature's compound interest formula.
A=P*e^(r*t)  can be applied to any natural growth and decay.
e = constant 2.71..... 

Comments

Post a Comment

Popular posts from this blog

THE EARTH, A SUPER ORGANISM

     JOIN MY COURSE: "Become a programmer in a day with python"       A man called 'love lock' (what a name) proposed a theory called Gaia theory, named after Greek Goddess.      It says, "Earth is a self-regulating organism like a human being.  The organic life in it interacts with in-organic matter and maintains atmosphere, temperature and environment".  Hence the earth is still suitable for the life to thrive.      Imagine, in a particular place, there are lot of flowers.  Some flowers are white and some are darkly coloured.  We know, white reflects light and heat while dark absorbs the same.  White flowers can thrive in hot climate.  But dark flowers requires cold climate.  The absorption and reflection balances and the environment reaches average, warm temperature at which both the flowers can co-exist.  This is the essence of "Gaia" theory.      On our earth, ...
3 comments
Read more

DISORDER IS THE "ORDER OF THE DAY"

         Imagine a balloon full of air.  The air molecules are moving randomly inside the balloon.  Let us pierce the balloon with a pin.  The air rushes out.  Why should not the air molecules stay inside the balloon safely and ignore the little hole?  That is not the way the world works.  The molecules always "want to occupy as many states as possible".  Hence the air goes out in the open to occupy more volume.   The things always goes into disorder (entropy) and the disorder increases with time.  The above statement is what we call "second law of thermodynamics".      Consider a cup of coffee on the table. Suppose the heat from entire room flows to your cup of coffee, the coffee will boil and the rest of the room will freeze.  Freezing means bringing things to order and arrangement.  It violates the second law.  Hence it will never happen.  Hence heat must flow from high ...
Post a Comment
Read more

CASINO'S GAME

           Let us find out how the casino survives with mathematics.      Say, your friend invite you for a game of dice.  You must bet (wager) 2 dollars.  If you roll 'six' you will get back 8 dollars.  The game will go on for 30 rounds.  All sounds good.      The probability of rolling 'six' is 1/6.  Since the game will be played for 30 times, the 'expected win' is 30*1/6 = 5.  That is, you are expected to win 5 rounds out of 30.  Hence your gain will be 5 * 8 =40 dollars.  ok.  This also implies that you will loose 25 rounds.  Hence your loss will be 25*2 =50 dollars.  Your net gain will be gain-less = 40-50 = -10 dollars. For 30 rounds, the loss is -10 dollars, Hence, for one round =-10/30 = -1/3 dollars.  There will be a loss of -1/3 or 0.33 dollars per round.  It is not a fair game.     Let us make a simple formula to calculate  'Pa...
4 comments
Read more