DON'T RETIRE RICH

Saturday 25 May 2024

REACHING THE CROREPATI CLUB WITH JUST RS.30,000/- SALARY, A REALISTIC GUIDE




Many people dream of joining the coveted CROREPATI CLUB,  but with a salary of Rs 30,000 per month, it can seem like a distant goal. However, with a strategic plan, consistent effort, and smart investing, this dream can be a reality. Let's delve into a practical plan with a step-by-step guide.

## 1. Start with a Manageable Investment

Set a Realistic Savings Target

Rather than aiming for an arbitrary amount, calculate how much you can comfortably save each month. Allocate 15-20% of your monthly salary for investment. For a Rs 30,000 salary, this translates to Rs 4,500 to Rs 6,000 per month. Remember, consistency matters more than the initial amount.

 

## 2. Harness the Power of SIPs (Systematic Investment Plans)

 

Systematic Investment Plans (SIPs) are a powerful tool for both saving and creating wealth. By investing a fixed amount regularly in a mutual fund, you benefit from rupee-cost averaging, which allows you to acquire more units when the market is low and fewer units when the market is high. This strategy helps to smooth out market fluctuations over time. ๐Ÿ“ˆ๐Ÿ’ฐ


Consider investing in equity mutual funds for the potential of higher long-term returns, which typically exceed those of fixed-income instruments. Think of SIPs as your financial garden ๐ŸŒฑ, where small, regular investments can yield significant returns over time. If you invest in an equity mutual fund with an expected annual return of 12%, here’s how your money can grow: ๐Ÿ’ฐ

 

Invest Rs 4,500 per month

  - At a 12% annual return, it will take about 27 years (324 months) to save Rs 1 crore.

Invest Rs 6,000 per month

  - You’ll reach Rs 1 crore in around 24 years (302 months).

Invest Rs 7,500 per month

  - Achieve the goal in about 22 years (283 months).

Invest Rs 9,000 per month

  - Accumulate Rs 1 crore in approximately 20 years (260 months).

 

## 3. Speed Up Your Savings with a Step-Up SIP/Top-Up Sip 

To achieve your goal faster, consider a Step-Up SIP. This involves gradually increasing your SIP amount annually, ideally in line with your expected salary increments. Step-Up SIP helps you reach your financial goals faster and without hassle. ๐Ÿš€
Let's explore how it works:

Start with Rs 4,500 per month

  - Increase your SIP amount by 5% every year.

  - After the first year, invest Rs 4,725 per month; the following year, Rs 4,961, and so on.

  - With this method, you can save Rs 1 crore in about 24 years (290 months).

- **Increase by 10% each year

  - Begin with Rs 4,500 per month and raise it by 10% annually.

  - You’ll reach Rs 1 crore in less than 22 years (265 months).

 

## 4. Detailed Step-Up SIP Scenarios

 

Let’s see how different starting amounts and step-up rates can help you save Rs 1 crore:

 

Starting with Rs 6,000/month

  - **5% increase/year:** Save Rs 1 crore in about 23 years (276 months).

  - **10% increase/year:** Reach Rs 1 crore in around 20 years (252 months).

 

Starting with Rs 7,500/month

  - **5% increase/year:** Achieve Rs 1 crore in about 21 years (252 months).

  - **10% increase/year:** Save Rs 1 crore in less than 19 years (230 months).

 

Starting with Rs 9,000/month

  - **5% increase/year:** Accumulate Rs 1 crore in approximately 20 years (240 months).

  - **10% increase/year:** Reach Rs 1 crore in about 18 years (216 months).

 

## Discipline: The Key to Success

The Discipline Reminder

Remember, discipline is your secret weapon. Avoid dipping into your investment for impulsive expenses. Stay committed, even when the stock market fluctuates. Consistency pays off in the long run.

Here are some tips to stay disciplined:

 

1. **Automate Your Investments:** Set up automatic transfers to your SIP account every month so that you don’t have to remember to invest manually.

2. **Avoid Unnecessary Withdrawals:** Resist the temptation to dip into your investment for non-essential expenses. Treat this money as untouchable.

3. **Review Annually:** Check your investment progress annually and adjust your SIP amount according to your salary increase and financial goals.

4. **Stay Consistent:** Even when markets are down, continue your SIPs. The principle of rupee cost averaging will benefit you in the long run.

 

## Key Takeaways

 

1. **Start Small and Steady:** Begin with an amount you can manage without financial strain.

2. **Increase Annually:** As your salary grows, gradually increase your investment to accelerate your savings.

3. **Stay Disciplined:** Maintain a consistent investment habit and avoid withdrawing your funds unnecessarily.


 


Like all things, step-up sip too has some challenges.

Income Growth Assumptions: Step-Up SIPs assume a steady increase in income year-on-year. However, there may be years when your income doesn’t increase as expected or expenses rise significantly, leaving less money for investing.

Changing Life Circumstances: Life events such as the birth of a child, job loss, or other unforeseen circumstances can impact your ability to maintain increasing investments. It’s essential to adjust your investment plan according to your financial situation.

 

 

## Conclusion

 

Remember, even small beginnings can lead to significant results when compounded over time. Achieving Rs 1 crore on a Rs 30,000 monthly salary is realistic with a disciplined and structured approach. Start small, increase your investments over time, and remain patient. Just like nurturing a plant into a tree ๐ŸŒฑ, your financial growth requires time and care. Begin today, stay committed, and watch your wealth flourish. ๐ŸŒŸ



ALSO CHECK OUT THIS VIDEO

 

Start taking the first step today and witness your wealth grow as you work towards achieving the status of a crorepati 

 

 

 

## Disclaimer

 Remember, investing in mutual funds carries risks, and past performance is not indicative of future results. Always consult with a financial advisor before making any investment decisions.

 

Regards & wishing you Super Financial Success

Srikanth Matrubai

Author: Don’t Retire Rich

Qualified Personal Finance Professional

AMFI Registered Mutual Fund Distributor

Note: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making any investment decisions.

 





All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

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