A Success Story

Amit and Rajesh started their career at the same time. Both decided to save at least 30 per cent of their total earnings every month.

Rajesh, a traditional investor, used his savings to buy insurance which didn't provide him adequate cover. While Amit, a risk-taker, liked exploring new investment avenues and invested in one of the consistently-performing mutual fund schemes on a regular basis. He also bought a term insurance plan to cover his family's insurance needs, though, it was not adequate.

Over the years, both continued investing regularly in their respective savings options. However Rajesh, sometimes, felt that Amit was involved in some risky business like gambling. While Amit was confident of what he was doing.

In the end, Amit was a happy Crorepati and Rajesh was struggling to make even a quarter of it for his retirement.

Let us understand how Amit did it: Both started saving in 1996 when the Sensex was at 3,085.20 points. Amit invested Rs 43,200 (30% of his total earnings in a year) in Reliance Growth Fund while Rajesh used the same amount to buy an insurance plan. They kept investing as per their plans till 2009. While Rajesh's investment grew to Rs 24.78 lakh, Amit's investment swelled to Rs 1 crore with some clever investing. The detailed calculations are as shown in the table.