Recently, a friend of mine called me – her voice brimming with excitement. She was only a lakh short of Rs. 10 Lakhs in her Scripbox account. She started investing very recently and could not get over the fact that in a fairly short time, she was able to accumulate that amount.
The word 'millionaire' does have a nice ring to it. In the Indian context, the big indicator of wealth used to be ‘lakhpati’ but with inflation eating away at the value of our earnings, a million or 10 lakhs is now a good goal to aim for.
But, for a lot of young earners starting out on their first job, it seems impossible to have that much money. This article will show you how you too can be a millionaire. All you need is a simple, easy to follow plan.
Let’s say you are a 22-year-old making Rs. 25,000 a month, and you can save Rs. 5,000 to begin with.
Here’s your plan:
Year 1: Save Rs. 5,000 per month and invest inUltra Short-term Debt funds or a recurring deposit. We recommend a debt fund because it has no TDS (Tax Deductable at Source).
Year 2: Increase your savings by 10% annually, to Rs. 5,500 per month (We’re sure you’ll get a salary hike!) and invest it in Ultra Short-term Debt funds.
Year 3-8: Again increase your savings by 10% every year, but now start investing it into tax saving equity funds. So, Rs. 6,100 in year 3, Rs. 6,700 in year 4, and so on.
By the time you are 30, you can expect to have more than Rs. 10. lakhs!