The ₹2.5 crore mistake most investors make isn't choosing the wrong stock — it's starting 10 years late
Most investors spend years searching for the next multibagger, but experts say the biggest wealth creation mistake is delaying investments. A 10-year delay in starting a ₹10,000 monthly SIP could reduce the final corpus by more than ₹2.5 crore, highlighting the power of compounding over stock picking.
- Aug 3, 2026,
- Updated Aug 3, 2026 7:10 AM IST
Most investors spend countless hours searching for the next multibagger stock or the best-performing mutual fund, hoping to maximise returns. But financial experts say the biggest determinant of long-term wealth is often far simpler: when you start investing. A decade's delay in beginning your investment journey can potentially cost more than ₹2.5 crore in lost wealth, even if you invest the same amount and earn identical returns.
The insight comes from WealthEnrich founder and investor Advait Arora, who argues that wealth creation is driven less by finding "magic" investments and more by following a handful of disciplined habits consistently over decades.
Time is the biggest wealth creator
Consider a simple example. A 25-year-old investing ₹10,000 every month through a systematic investment plan (SIP) in a diversified equity index fund earning an average annual return of 12% could accumulate a corpus of around ₹3.5 crore by the age of 55.
Now compare this with another investor who starts at 35 but invests the same ₹10,000 every month and earns the same 12% annual return. By age 55, the corpus is only about ₹1 crore.
The difference — more than ₹2.5 crore — is not due to poor stock selection or lower returns. It is simply the cost of losing 10 years of compounding.
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Compounding allows investment gains to generate further gains over time, making the longest investment horizons disproportionately valuable.
Most wealth is created in the final years
One reason many investors underestimate compounding is that portfolio growth appears slow in the early years.
Using the same ₹10,000 monthly SIP example, an investor contributes roughly ₹12 lakh over the first decade, with the portfolio growing to around ₹23 lakh. By the end of 20 years, the investment is worth nearly ₹1 crore.
However, the most dramatic growth occurs during the final decade, when the corpus expands from approximately ₹1 crore to nearly ₹3.5 crore. In other words, over 70% of the final wealth is created in the last 10 years, provided the investor remains invested.
Financial planners often say that exiting long-term investments prematurely can significantly reduce the benefits of compounding.
ALSO READ: Zepto IPO: Unlisted shares tumble as listing plans stall; experts flag valuation reset
Increase SIPs as income grows
Starting early is only one part of the equation. Increasing investments periodically can substantially improve long-term returns.
According to Arora's illustration, a flat ₹10,000 monthly SIP invested for 20 years at a 12% annual return grows to around ₹1 crore. But increasing the SIP by just 10% every year can lift the corpus to nearly ₹2.3 crore, despite the total investment rising to about ₹68 lakh.
This "step-up SIP" strategy allows investors to align investments with salary hikes while accelerating wealth creation.
| Scenario | Monthly SIP | Investment Period | Estimated Corpus (12% annual return) |
|---|---|---|---|
| Start investing at age 25 | ₹10,000 | 30 years (till age 55) | ~₹3.5 crore |
| Start investing at age 35 | ₹10,000 | 20 years (till age 55) | ~₹1 crore |
| Flat SIP | ₹10,000 | 20 years | ~₹1 crore |
| 10% annual Step-up SIP | Starts at ₹10,000 | 20 years | ~₹2.3 crore |
| Car EMI vs Investing | ₹25,000/month | 5 years + 15 years compounding | ~₹1.2 crore (if invested instead) |
| Emergency Fund | 6–12 months of expenses | — | Helps investors avoid selling long-term investments during market downturns. |
Don't ignore opportunity costs
The guide also highlights the hidden cost of discretionary spending financed through EMIs. For example, paying a ₹25,000 monthly EMI for a depreciating asset such as a car over five years amounts to roughly ₹15 lakh in repayments.
If the same ₹25,000 were invested every month for five years and then allowed to compound for another 15 years at 12%, it could potentially grow to more than ₹1.2 crore.
Equally important is preparing for market downturns. Maintaining six to 12 months' worth of expenses in liquid funds or fixed deposits can help investors avoid selling long-term investments during market corrections, allowing compounding to continue uninterrupted.
While no investment can guarantee 12% annual returns, the broader lesson remains consistent: long-term wealth is built less by predicting market winners and more by starting early, investing regularly, increasing contributions over time and staying invested through market cycles.
Most investors spend countless hours searching for the next multibagger stock or the best-performing mutual fund, hoping to maximise returns. But financial experts say the biggest determinant of long-term wealth is often far simpler: when you start investing. A decade's delay in beginning your investment journey can potentially cost more than ₹2.5 crore in lost wealth, even if you invest the same amount and earn identical returns.
The insight comes from WealthEnrich founder and investor Advait Arora, who argues that wealth creation is driven less by finding "magic" investments and more by following a handful of disciplined habits consistently over decades.
Time is the biggest wealth creator
Consider a simple example. A 25-year-old investing ₹10,000 every month through a systematic investment plan (SIP) in a diversified equity index fund earning an average annual return of 12% could accumulate a corpus of around ₹3.5 crore by the age of 55.
Now compare this with another investor who starts at 35 but invests the same ₹10,000 every month and earns the same 12% annual return. By age 55, the corpus is only about ₹1 crore.
The difference — more than ₹2.5 crore — is not due to poor stock selection or lower returns. It is simply the cost of losing 10 years of compounding.
MUST READ: NSE IPO likely by September before Shradh; check the possible timeline
Compounding allows investment gains to generate further gains over time, making the longest investment horizons disproportionately valuable.
Most wealth is created in the final years
One reason many investors underestimate compounding is that portfolio growth appears slow in the early years.
Using the same ₹10,000 monthly SIP example, an investor contributes roughly ₹12 lakh over the first decade, with the portfolio growing to around ₹23 lakh. By the end of 20 years, the investment is worth nearly ₹1 crore.
However, the most dramatic growth occurs during the final decade, when the corpus expands from approximately ₹1 crore to nearly ₹3.5 crore. In other words, over 70% of the final wealth is created in the last 10 years, provided the investor remains invested.
Financial planners often say that exiting long-term investments prematurely can significantly reduce the benefits of compounding.
ALSO READ: Zepto IPO: Unlisted shares tumble as listing plans stall; experts flag valuation reset
Increase SIPs as income grows
Starting early is only one part of the equation. Increasing investments periodically can substantially improve long-term returns.
According to Arora's illustration, a flat ₹10,000 monthly SIP invested for 20 years at a 12% annual return grows to around ₹1 crore. But increasing the SIP by just 10% every year can lift the corpus to nearly ₹2.3 crore, despite the total investment rising to about ₹68 lakh.
This "step-up SIP" strategy allows investors to align investments with salary hikes while accelerating wealth creation.
| Scenario | Monthly SIP | Investment Period | Estimated Corpus (12% annual return) |
|---|---|---|---|
| Start investing at age 25 | ₹10,000 | 30 years (till age 55) | ~₹3.5 crore |
| Start investing at age 35 | ₹10,000 | 20 years (till age 55) | ~₹1 crore |
| Flat SIP | ₹10,000 | 20 years | ~₹1 crore |
| 10% annual Step-up SIP | Starts at ₹10,000 | 20 years | ~₹2.3 crore |
| Car EMI vs Investing | ₹25,000/month | 5 years + 15 years compounding | ~₹1.2 crore (if invested instead) |
| Emergency Fund | 6–12 months of expenses | — | Helps investors avoid selling long-term investments during market downturns. |
Don't ignore opportunity costs
The guide also highlights the hidden cost of discretionary spending financed through EMIs. For example, paying a ₹25,000 monthly EMI for a depreciating asset such as a car over five years amounts to roughly ₹15 lakh in repayments.
If the same ₹25,000 were invested every month for five years and then allowed to compound for another 15 years at 12%, it could potentially grow to more than ₹1.2 crore.
Equally important is preparing for market downturns. Maintaining six to 12 months' worth of expenses in liquid funds or fixed deposits can help investors avoid selling long-term investments during market corrections, allowing compounding to continue uninterrupted.
While no investment can guarantee 12% annual returns, the broader lesson remains consistent: long-term wealth is built less by predicting market winners and more by starting early, investing regularly, increasing contributions over time and staying invested through market cycles.