Education . Personal Finance . 2 of 3 RupeeCase
Same income. Same raises.
Rs 21.5L apart.
Two people. Both start at Rs 1L a month. Both get 8 percent raises for ten years. Both invest the savings at the same 11 percent. The only difference is where the raise goes.
Year Income / mo Creep . saves Bank half . saves
110000020%20%
513604920%27.9%
1019990020%35.0%
Corpusafter 10 years invested at 11 pctRs 54.4LRs 75.9L
The creeper's savings rate sat at 20 percent the whole decade while the raise quietly fed a bigger lifestyle. Banking half of every increment dragged the rate to 35 percent without ever feeling like a cut. Identical earnings, identical returns, a Rs 21.5L gap.