To achieve millionaire status, it is essential to grasp the significance of saving and investing. Regardless of whether your income is modest or substantial, setting aside a portion of your earnings for savings and investments is crucial. The key questions are: how much should you save, and where should you allocate your investments? Detailed insights can be found in the following slides.
First, recognize this principle
To truly become a millionaire, understanding the value of saving and investing is paramount. No matter the size of your salary, it is vital to save a portion and invest it wisely. Consider how much to save and the best investment avenues. More information is available in the slides below.
Implement the 70:15:15 strategy
If your goal is to become a millionaire with a monthly salary of Rs 20,000, adopting the 70:15:15 strategy for saving and investing is advisable. This approach entails allocating 70% of your income for essential expenses, setting aside 15% to build an emergency fund, and investing the remaining 15%.
If your monthly salary is Rs 20,000, then 70% of that amount is Rs 14,000, which means you will need to manage all your expenses within this budget. Additionally, it is advisable to allocate 15% each, or Rs 3,000, towards an emergency fund and investments.
Regarding investment strategies to achieve millionaire status, a prudent approach is to invest your savings in mutual funds via a Systematic Investment Plan (SIP). Mutual funds typically offer an average return of 12 percent, along with the advantages of compounding. This allows your money to grow into substantial wealth over time.
If you consistently invest Rs 3,000 each month through SIP for a duration of 30 years, your total investment will amount to Rs 10,80,000. However, with a 12 percent return, you can expect to earn Rs 95,09,741 in interest alone. Consequently, after 30 years, your total wealth will reach Rs 1,05,89,741.
