If you thought that you need to earn lots of money or win a lottery to become a crorepati, then think again. Small savings can also generate crores of rupees for you. It’s a myth that if you are earning lakhs of rupees a month, then only you can save crores of rupees over a period of time. Many times it also happens that people earning that much fail to save that much of amount and the reason behind the same is not managing your savings properly.
Although many of you dream to have crores of rupees in your savings account, but that becomes quite impossible to do so because you have to meet your daily expenses for various needs and wants. Most of you don’t even realize how much you are saving monthly and eventually, you are not able to save that much amount which can secure your family’s future.
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At your mid age, when you mostly need the money for your children’s higher education or want to send them abroad for higher studies, you fall short of money and end up taking a loan which again puts you in a situation where you have to pay off the debt for the rest of the years left in your job. Therefore, if you are dreaming of fulfilling your children’s dream and still waiting for your salary to grow, then your dream will remain a dream only because then it will be too late for you to accumulate a big amount at that particular point of time. Therefore, start saving as early as possible to avoid the mid age crisis.
How to plan?
By saving Rs 3000 a month, which is a very small amount to save in a month and which will also not affect your household expenses, you can easily build a corpus of approximately Rs 1 crore or more between the age of 45 and 60.
Suppose, you start your savings at the age of 24. That is the ideal time for anyone who has a job or has just started doing a job to save at least Rs 3000 a month, which is not a big amount. By doing so for next 22 years (by that time the age will be 46), you will be able to generate a corpus of approximately Rs 1 crore, assuming the rate of return at 18%.
Where to save?
To earn that much of interest, you need to invest your money in various funds. At this age you can actively invest in equity mutual funds, where you can even earn more interest as mentioned above. It is only because this is a time when you can take high risks as no one is dependent upon you. You can minimize the risk by diversifying your portfolio. Break your money component into two or three parts and invest some amount in large-cap equity funds, a major part of it in small and mid-cap funds and the remaining in diversified funds. This will help you in sustaining your average returns for a longer period of time. The break-up of your investments into these categories of funds decides the return on your investments.
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What do you need to do then?
After putting your money into such kind of funds, you need to regularly review your funds taking the help of a financial adviser, who helps you in managing funds while making investments for a longer period of time.
Not in your early 20’s?
If you think that you are not in your 20’s and have crossed that age and are in 30’s, then in such a case you only need to increase the investment amount to reach your goals at the age of 46 or else, if you think that you can shift your financial goals till the age of 50, then in such a case you can simply invest the same amount for that particular time horizon. The only thing you need to do at that time is to take certain other measures like buying insurance to protect your family and overall financial goals.