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Are you not sure about investing because you don’t earn a lot each month?
Well, you are not alone in thinking this; it’s a common misconception that you need a ton of money to invest. The truth is you can start investing by ₹500/month, and it can make a big difference over time. In this blog, we will discuss the most asked question: How to make ₹1 crore.
No matter how small your income is, you can save a little bit each month and invest it. It is about building a habit of setting aside even a tiny amount for your future. It is like planting a seed where you don’t need a big garden or a fancy setup to grow a beautiful flower or a tree, and you can start with a small pot and some care. Similarly, you don’t need a huge bank balance to start investing.
By investing regularly, your money has the potential to grow over the years, thanks to the magic of compounding. It is like your money making more money, which can lead to financial security in the long run.
So, don’t let low monthly incomes hold you back from investing. Start small, invest consistently, and watch your investments grow over time. It is an achievable goal that can help you build a better financial future, even if you have just started your career and your Salary is ₹30,000.
50-30-20 Rule: A Blueprint for Achieving Your Financial Goals
The 50-30-20 rule is an easy way to create a budget. It is not a strict rule, but a helpful guideline suggests dividing your income into three parts:
- You should use 50% of your income for things like rent and groceries,
- 30% can go towards fun stuff like going out or hobbies, and
- the remaining 20% is for saving money or paying off debts.
For someone who earns ₹30,000 per month, following this rule would mean setting aside ₹6,000 for savings. However, we’ll consider a more conservative approach, saving just 13.33% or ₹4,000 monthly.
Can Saving ₹4,000 Monthly Help Me Reach ₹1 Crore?
SIPs or Systematic Investment Plans known as a smart way to invest your money and build wealth over time. It comes with compounding that helps you build wealth.
Let’s break down how saving ₹4,000 every month can potentially add up to ₹1 crore through SIPs:
- If you invest ₹4,000 each month for 30 years and get an average annual return of 12%, you could have around ₹1,41,19,655 when it matures.
- If you continue investing for 27 years and 3 months, you could amass a total of ₹1.01 crore.
- If you invest the same ₹4,000 every month for 25 years at the same 12% return, you could expect a maturity amount of approximately ₹75,90,540.
It is important to remember that these calculations are based on an average return of 12%. If your investments perform even better, you could have even more money.
On the internet, you can find various websites where you can quickly figure out the total amount you will have from your SIP (Systematic Investment Plan) by entering a few basic details. All you need to do is provide your monthly SIP amount, the duration you plan to invest (SIP tenure), and the expected rate of return on your investments. These tools will do the math for you and show you the estimated total amount you could accumulate over time.
The Flexibility of SIP Investment
SIPs offer flexibility, allowing you to adjust your investments as your income grows. You can use the ‘step-up SIP’ feature to increase your SIP investment amount with your rising income, helping you reach your financial goals faster.
How to Accumulate ₹10 Crore for Retirement
Many of you dream of having a retirement fund, like ₹10 crore. How much you need to invest every month depends on two main things: how long you have until retirement and the returns you expect. Let’s see how this works based on your age and how you like to invest.
I am 30 Yr old: How can I reach ₹10 crore in 30 years?
| Investment Approach | Expected Average Returns | Monthly Investment (₹) | Investment Tenure |
|---|---|---|---|
|
Conservative Investor |
8.00% |
68,000 - 69,000 |
30 years
|
|
Balanced Investor |
10.00% |
46,000 - 47,000 |
30 years
|
|
Aggressive Investor |
12.00% |
30,000 - 31,000 |
30 years
|
I am 35 Yr old: How can I reach ₹10 crore in 25 years?
| Investment Approach | Expected Average Returns | Monthly Investment (₹) | Investment Tenure |
|---|---|---|---|
|
Conservative Investor |
8.00% |
₹1,00,000 - ₹1,10,000 |
25 years
|
|
Balanced Investor |
10.00% |
₹77,000 - ₹78,000 |
25 years
|
|
Aggressive Investor |
12.00% |
₹55,000 - ₹56,000 |
25 years
|
I am 40 Yr old: How can I reach ₹10 crore in 20 years?
| Investment Approach | Expected Average Returns | Monthly Investment (₹) | Investment Tenure |
|---|---|---|---|
|
Conservative Investor |
8.00% |
₹1.6 lakh - ₹1.7 lakh |
20 years
|
|
Balanced Investor |
10.00% |
₹1.3 lakh - ₹1.4 lakh |
20 years
|
|
Aggressive Investor |
12.00% |
₹1 lakh - ₹1.1 lakh |
20 years
|
Note: If your investments perform even better, you could end up with even more money.
Final Words
Starting early with investments is smart because time allows you to invest less while potentially earning more. You can increase your investments as your income grows, which is an excellent strategy for reaching your financial goals faster.
Even if you haven’t started investing, it’s never too late to begin. Start with what you can and be consistent. For long term investments of 20 years or more, consider putting a portion of your money into stocks because equity has a history of outperforming inflation, unlike many debt investments.
