21 October 2012

Starbucks in India: Choose between a Coffee for Rs 150 or Rs 1.65 Lacs from SIP?

Starbucks has finally opened its first store in India. Being in Mumbai, we got an opportunity to check out the store on very first day. Lucky us... :-)

Starbucks in India
From Starbucks (India) website
Checking the menu, we found that a cup of coffee, could cost anywhere between Rs 100 to Rs 200, depending on type of drink. Though this does not seem much at first, if it does become a part of routine for young generation, then it could eventually turn out to be a bit costly. Assuming one makes a visit every week and shells our Rs 150 (in between Rs 80 and Rs 200) for a coffee, one would end up spending about Rs 600 a month on coffees.
Now, if this amount was invested on monthly basis (SIP) in a good mutual fund scheme, then assuming 15% pa growth, the amount would have become Rs 1.65 Lacs in 10 years. You can calculate the same yourself by using a SIP Calculator.

A Snapshot from SIP Calculator (Source: HDFC MF)
Now don't think that we are against coffee or enjoyment. Instead of coffee, you can choose expenditures made on more unhealthy habits like cigarettes. And result would be more or less same. All we want to convey is that if you are ready to invest systematically for long term, you are bound to earn handsome returns.

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