Small is always big!!!
If you are looking for a solution to the above questions, here is how you can create wealth of 2 Crore just by leaving two bad habits.
Well, We agree by cutting down small expenses wont help you earn big buck in short term but it will really improve your financial life if you plan for a longer duration.
We, in our financial life, have a lot of bad habits like
Small pains taken today by cutting down on these expenses can help you create wealth in a long run. Many a times, we keep on thinking about bigger problems & tend to forget about these small problems.
Leave Smoking & become a Crorepati at Retirement
Now normally a person in India is retired at the age of 60. So, if a person is aged 35 or below, he has 25 long years to plan his finances and reap benefit at the time of retirement
Example:
Every person dream to become a Crorepati. And we think that money can be handy enough at the time of retirement. Now, how it is possible to become Crorepati?
You would be able to build a corpus of 1.20 crore by retirement if you just quit your smoking i.e Rs 40 per day & save Rs 30 per day on petrol. We don’t have a exact idea as to how much does a quality smoker spends on smoking per day. We have safely assumed it to be Rs 40 pr day. Now if you invest Rs 70 per day which we have mentioned above in equity mutual funds would help you in building a corpus size of Rs 1.20 Crores by retirement assuming the current age to be 35 or less. This is possible by assuming a rate of return of 18% per annum which Sensex & Mutual funds have delivered taking into consideration last 5 years , 10 years or infact 20 years of history. If you still don’t believe, Sensex value as on 1 Jan, 1991 was 1027 & on 1 Jan, 2001 was 3940
Forgive Junk Food & Plan out Child Eduaction & Foreign Vacation
Likewise,every person has a financial goal of his child education & his daughter marriage & a oreign vacation. And Likewise,you would be able to build a corpus of 35 Lakhs in next 18 years at the age of 48 assuming the current age being 30 if you just quit your junk food i.e Rs 75 per day which you send at the office canteen with your office friends Now if you invest Rs 75 per day in equity mutual funds would help you in building a corpus size of Rs 36 Lakhs by next 18 years or infact another 1 Crore if you are able to hold it till retirement i.e 25 years by assuming a rate of return of 18% per annum
We haven’t mentioned anything quitting your drinking habits. So you can continue drinking & become a double Crorepati.
– This article has been provided by Mayank Gupta, an MBA in Finance. He also runs a website: WealthBazaar.in
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View Comments
Dear Pankaj,
0
I have been investing Rs. 1000 in Reliance Long term Equity fund for last 13 months. The Said investment is showing a steady declinement in performance if i compare it with my other mutual fund investment of Rs. 1000 in ICICI focused blue-chip fund. Should I continue with Reliance long term equity fund or should i switch it to any other fund.
Hi Anirban,
I would like to know more details about your risk profile and your financial goals before suggesting you funds as it is difficult to suggest otherwise.
But if you want to stick to pure equity funds category only, then I would personally recommend HDFC Top 200 Fund (evergreen fund)
I want to make a savings balance for the higher studies of our unborn child whom we are expecting in another 7 months. I have invested Rs. 1000 each in reliance long term equity fund and icici prudential focussed blue chip fund and planning to invest another Rs 1000 in another fund. kindly suggest me which fund should i select and how long should i continue with these funds. How much return should i expect from the above mentioned investments.
@Anirban
You should first buy a term insurance plan if not already taken.
After that, create your portfolio for long term by mixing equity and debt based investments. You may also add gold investment but not more than 10-15% of total investment.
For equity, you may pick one fund each from different categories like Large cap, Multi cap and Small and mid cap.
Invest into PPF or debt based mutual funds for debt portion.
Equity investment should be done for long term. Minimum time frame you should stay invested in equity investments is 5-8 years.
if you make such portfolio, you can expect 12-15% returns over a longer period (8-10 years).
I have a Reliance Tax relief 96 Growth and investing 1500 pm, i started 1 year back but i dont see any profits compared to other funds i hold, please suggest me if i need to hold this fund or should i change over to any other fund.
Thank you
@Bilwa
As markets have not been very good in last 1-2 years, you won't see much profits in your folio. In equity funds, minimum investment duration should be around 3-5 years.
Hi Bilwa,
I dont think so, there is any fund by the name of Reliance Tax Relief 96. Either it is Birla Tax Relief 96 OR Reliance Tax Saver
hi
i want 1 crore in next 25 year , so pl sugest how much i have to invest and which fund to invest please sugget
@Sandeep
If you invest around 8000 per month for next 25 years into equity diversified mutual funds, at expected return of 10%, you would have 1 crore after 25 years.