Can you build a Rs 1 crore corpus with a monthly salary of Rs 30,000?
For individuals earning a modest monthly income of Rs 30,000, the prospect of accumulating Rs 1 crore through Systematic Investment Plans (SIPs) might seem far-fetched.
Can you build a Rs 1 crore corpus with a monthly salary of Rs 30,000?
For individuals earning a modest monthly income of Rs 30,000, the prospect of accumulating Rs 1 crore through Systematic Investment Plans (SIPs) might seem far-fetched. However, by adhering to a disciplined investment strategy, even a monthly saving of Rs 4,000 can pave the way to a substantial wealth corpus.
Budget Allocation: The golden rule of budgeting, 50:30:20, suggests saving 20% of monthly earnings. For someone earning Rs 30,000, this translates to Rs 4,000 – an amount sufficient for SIP investments.
The Power of SIPs: SIPs are highlighted as an attractive investment option due to their flexibility and the potential for significant returns. Over the past few years, SIPs have offered an average return of up to 12%.
Long-Term Vision: The article recommends investing in SIPs for an extended period to capitalize on the benefits of compound interest. Adhil Shetty, CEO of BankBazaar.com, emphasizes the ability to tailor SIPs to various time horizons and asset classes.
Wealth Creation Scenario: Illustrating with an example, if an individual invests Rs 4,000 monthly for 27 years and three months, the total investment would be Rs 13.1 lakh. At an average return rate of 12%, the capital gains could reach Rs 88.07 lakh, resulting in a total maturity value of Rs 1.01 crore.
Step-Up SIPs for Accelerated Growth: The article suggests utilizing the step-up SIP function, allowing investors to increase their SIP contributions as their income grows. This can expedite the achievement of financial goals.
Market Risks Disclaimer: A disclaimer reminds readers that SIP investments are subject to market risks, emphasizing the importance of conducting personal research or consulting with financial advisors before investing.
The article encourages individuals with limited monthly incomes to consider the long-term benefits of SIP investments, offering a practical guide on how disciplined saving and investing can lead to substantial wealth accumulation over time.
