“I’m still in college, I have time to think about my investments in the future”

“I barely have any money to invest right now in college”

“I’m unsure about how to invest my money”

So, when is the best time to invest in Mutual Funds?

The right time is now, especially when investing in long-term equity mutual funds, returns earned in the long run lead to wealth generation and the creation of a better financial future. Mutual funds utilize the power of compounding.

Compounding refers to earning interest along with the principal invested already, if this new amount received is re-invested year after year, it can make a huge difference to your investments.

Let’s take the example of 3 college friends - Shreya, Rohit, and Mohan. They all plan to retire by the age of 50 and want to have 5 crores saved before they retire for their financial security.


Shreya is extremely ambitious and hardworking. She does a part-time internship in college and decides to invest monthly in a Systematic Investment Plan(SIP) in long-term equity Mutual Funds. She begins investing at the age of 20 itself.

For her to save 5 crores in 30 years, assuming 12 % returns, she needs to invest 14,300 monthly and the total amount needed to be invested would be 51 lakhs. The amount she receives is almost 10X her investment! As she ages, 14,300 would be a small amount for her due to having a stable job, and hence she could easily invest that amount monthly along with fulfilling other responsibilities like marriage, vacation planning, and child education.


Rohit didn’t worry about personal finance or wealth planning in college and his early twenties. However, once he turned 30 and was thinking about marriage, he decided to begin investing monthly in a SIP to fulfill his 5 crores saving goal.

For him to save 5 crores in 20 years, assuming 12 % returns, he needs to invest 50,000 monthly and the total amount needed to be invested would be 1.2 crores. The amount he would receive is 4X his investment. However, setting aside 50,000 monthly for investment might prove to be a challenge considering he has other financial responsibilities to fulfill.


Mohan had a very carefree attitude and believed in spending money as it came in his 20s and 30s. When he turned 40, he realized that he would need to have savings for his retirement at 50 and decided to start investing because better late than never.

For him to save 5 crores in 10 years, assuming 12% returns, he would need to invest 2,20,000 monthly! His total investment would be 2.64 crores and he earns almost 2X his investment. However, setting aside 2,20,000 for a SIP monthly would be extremely unrealistic and tough considering at 40, he would have other responsibilities as well.

To summarize

Since Shreya started investing the earliest, she earns the maximum returns while investing the least amount, she can easily invest money monthly while fulfilling other responsibilities and retire at 50.

Rohit started at 30, however, he earns 5X but has to invest a much larger amount monthly which could prove to be difficult and he might have to postpone his retirement.

Mohan started very late at 40 and hence saving 5 crores in 10 years requires a very large monthly investment which is almost impossible.

To conclude

The earlier you begin investing, the higher the returns you receive. It’s highly advisable for all college students to begin investing even if they set aside a small amount because it all adds up in the long run. Start your investments today with the help of an investment manager.