Watch the second show of our six-part series to become a smarter investor.
Do you know the relationship between "kheer" and compounding? Lord Krishna was an early advocate of the benefits of compounding. The fact that devotees are treated to the sweet dish at temples across the country traces its roots to an old debt to the deity, multiplied many times over.
The lure of instant gratification is a folly many investors have fallen prey to. Ferreting away small amounts of money over extended periods of time can actually trump the seemingly obvious choice of taking a big payout all at once. The magic of compounding is seen if an investment, however small, is made over a long period of time.
For instance, if given a choice, would you accept Rs 10,000 per day for 30 days, or one paisa on the first day, which in turn, doubles with each passing day for the rest of the month? The answer may just surprise you.
In the previous episode of Smart Alex, our protagonist Pratik, made a miscalculated gamble in the stock market. However, armed with the knowledge of compounding, redemption is not far away.
How will he manage to recover his capital? Watch on to find out.
Also Watch:Money Wise With Smart Alex - Part 3: How Pratik learns to read companies' financial statements over tea and biscuitsNot sure which mutual funds to buy? Download moneycontrol transact app to get personalised investment recommendations.