Finn: “I’ve been investing in an equity mutual fund for my financial independence goal, as per your suggestion. But the corpus is not growing at all! Should I sell this and buy something else?”

Nancy: “Hey, you at least listened to Meme and started investing. I still haven’t started anything!”

Meme: “Do you guys know about the Bamboo plant?”

Finn (angrily): “What does that have anything to do with what I just asked you?”

Meme, continuing patiently: “Say, we went to a Nursery today and bought you a few Bamboo seeds. Do you know how long it will take the plant to grow?

Nancy: “I have heard Bamboo grows pretty quickly, isn’t it? Something like 2 months?”

Finn: “I thought it was the opposite – that it takes years for Bamboo to grow?”

Meme: “So, what really happens is that for the first 3-5 years, you don’t see much growth above ground. But in reality, the Bamboo is growing under the ground, developing and establishing its roots deeply. And then when it starts growing above ground, it grows really quickly – like 60 days or so.”

Finn: “In reality then, the Bamboo hasn’t grown in 60 days, it has grown in 5 years and 2 months.”

Meme: “That’s correct!”

Finn: “What you are saying then is that I should give time for my equity mutual fund to grow?”

Meme: “Yes! Equity returns may be very asymmetrical and lumpy. You might see nearly no growth or even negative returns even after several years. But most of your returns in a decade might come in 60 days if you had the patience to stay invested. Which is why equity is still the best asset class with the capability to beat inflation in the long run, and therefore worth the risk if you are able to be patient!”

Nancy: “Is it not possible to buy a Bamboo stem instead of seeds, and cut short the time it takes for the tree to grow? Can I not invest just when the market looks like it’s going up?”

Meme: “For that metaphor to really make sense, it would mean someone else had sown the seeds and were patient enough until the seeds grew into a plant, from which they’ve given you a stem. Say your parents have left you an inheritance of investments made decades ago.”

Nancy: “Haha – I haven’t been fortunate on that front.”

Meme: “In that case, you better start investing soon. The longer you delay, you are losing the biggest asset you actually have in possession.”

Nancy: “Money?”

Meme: “Time!”

Nancy: “Ah, really?”

Meme: “Let’s say Finn here had started investing Rs.5000 per month from the age of 21, but stops investing at age 30. But he lets his money stay invested until retirement at age 65. And say you, Nancy, don’t start investing until you are 31, but you invest the same Rs.5000 and continue investing until age 65, who do you think will end up with more money at the end, at age 65? Let’s say both your investments grow at an annualized rate of 10% for simplicity’s sake.”

Finn: “I guess Nancy will have more money in the end? She has been investing for 35 years while I had invested for only 10 years.”

Meme: “That’s where you are missing the power of compounding! Finn will end up with nearly Rs. 3 Crores, while Nancy will have only Rs. 1.8 Crores.”

Nancy: “Wow, that’s a huge difference!”

Meme: “Indeed! That’s why I’m imploring you to start investing today! The longer you delay, the more difficult it will get for your money to grow at a rate fast enough to beat inflation and meet your long-term goals.”

Finn: “What you are saying then is that – as with Bamboo plants, you need to give time and be patient for your money to grow.”

Nancy: “And the earlier you start, the more time and patience you can afford to give.”

Meme: “You got it! That’s why time and patience are even more valuable than the money you are investing.”

Meme: Dear reader, if you want to improve your relationship with money as well, the first thing to do is to get a clear picture of your income, expenses, assets and liabilities.

This excel from Fin & Me Wealth Partners LLP is a good place to start.

Fill this up and email it to: for a FREE review of your financial situation and help you get started on your path to financial independence.

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