My junior colleague is richer than my manager. Here's how.

"My savings just crossed a crore!" I almost choked on my coffee. Anju, my junior at work, had just dropped this bombshell over our morning catch-up.

I've known Anju for quite a few years now. She's 40, drives a Wagon R, brings home-cooked lunch, and has never struck me as someone who splurges. Yet here she was, talking about becoming a crorepati while our senior manager Rupam, at 55, still frets about his retirement savings.

I had to know her secret.

Starting small

"But how?" I blurted out before I could stop myself.

Anju smiled. "My starting salary was not much," she recalled, stirring her green tea. "I was 22, living in a tiny rented flat, and had watched my parents struggle with finances. I decided right then that I didn't want that life for myself."

She started investing Rs 8,000 monthly. "My friends thought I was crazy. 'Live a little,' they'd say. But I couldn't shake off those memories of money problems at home."

But that wasn't it. Every year, when she got her increment, she would increase her investment by 10 per cent. "It was like giving myself a yearly challenge. Some years were tough, especially when I had to pay for my MBA. But I stuck to it."

The cost of waiting

Later that week, curiosity got the better of me, and I caught up with Rupam, my manager, during lunch. His story was starkly different.

"You know how it is," he sighed, picking at his salad. "First, it was the kids' education, then my parents' medical bills. I always thought I'd start investing once I got that big promotion.

And that's what I did. I now have Rs 80 lakh in my account," he beamed proudly. "Not bad for 12 years of investing, right?"

True. But I was astonished by how Anju managed to grow a larger corpus than even her manager.

The math didn't seem to add up. Rupam started investing Rs 25,000 monthly when he was 43—that's more than three times what Anju began with. But while Anju increased her investments every year, Rupam's amount stayed constant.

The numbers hit me hard. Anju, who started with a humble Rs 8,000 and now invests Rs 44,479 monthly thanks to her yearly increases, has built a portfolio worth Rs 1.15 crore. That's over Rs 35 lakh more than what Rupam accumulated despite his bigger salary and higher monthly investment.

And the gap will only widen. By the time they both turn 60, assuming the same investment pattern and a 12 per cent annual return, Anju's portfolio could grow to a massive Rs 21 crore. Rupam, with just five years left to retire, might reach over Rs 1.6 crore. The head start Anju got by starting early would make her 13 times richer than Rupam in their golden years.

When I mentioned this to Anju, she smiled. "You know what's funny? I wasn't even trying to get rich. I just didn't want to end up asking my kids for money in my old age."

The silent wealth builder

How did Anju get ahead? Compounding, combined with the strategy of increasing investments every year. When you stay invested for the long term, you don't just earn returns on your investment; you earn returns on your returns. But Anju puts it more simply: "It's like planting a mango tree. The sooner you plant it, the sooner you get mangoes. And once you get mangoes, you can plant their seeds too."

This story of Anju and Rupam teaches us two crucial lessons:

1. Time is powerful. Starting early with a smaller amount beats starting late with a larger amount.

2. Incremental growth matters. Regularly increasing your investment amount, even by a small percentage, can significantly boost your wealth.

This morning, I increased my monthly SIP again by 10 per cent. Small steps climb mountains. After all, the best time to plant that mango tree was yesterday. The second best time? You know the answer.

Also read: Inflation is making you poorer. Here's how you can fight back

This article was originally published on February 05, 2025.