Скачать или смотреть Baniya Rule Double Your Money | Business | Sarthak Ahuja

This is one equation that Baniya Businessmen understand very well about finance that most others miss out on...

The only thing you need to understand about finance is how quickly will your money double...

For example, your money doubles in almost 9 years when you invest in a Fixed Deposit...

It doubles in 6 years when you invest in the stock market index like the NIFTY or SENSEX...

And for any business to make sense or to be worth doing... the money should double in less than 4 years... I’ll explain how...

Which means, if you invest Rs 1 Crore in your business... in less than 4 years, you should be able to recover and take out Rs 1 crore as profit after tax...

Now, the next question is, how does this make sense...

It’s core is in the Rule of 72 in Finance...

Where you divide 72 by the rate of return on an investment, and you get the number of years in which your money doubles...

For example, in an FD, if you get 8% p.a. return, your money doubles in (72 / 8) = 9 years

In the stock market index, if you get 12% p.a., your money doubles in (72 / 12) = 6 years

And there are places where you put in no extra effort of your own, you just invest, and it automatically delivers a return...

So when you invest money in a business and work hard... your money should come back in half the time than it would come back had you invested in the stock market, which means 3-4 years...

So (72 / 4) = ~18 which means, almost 18% p.a.

And if a business cannot double your money in less than 4 years, it is not worth wasting time on. You rather find better use of your money and time.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.