To lead a comfortable life and have a financially secure future, you need to exercise financial discipline and have a well-defined financial strategy. This includes saving more money, making informed investments, and cutting down on your expenses. But all these efforts would count for nothing if you do not factor in the inflation rate while planning your financial future.
Let’s assume that your age is 30 years and your monthly salary is Rs. 100,000. Say, you spend almost 60% of your salary on your regular monthly expenses. This will leave you with a spare amount of Rs. 40,000. Now, assuming that you want to keep Rs. 15,000 for emergency purposes in your bank account and can spare Rs. 25,000 for investment. If you have an investment horizon of 15 years and the expected rate of returns on the investment is 10%, then by the time you are 45 years old, you will have a corpus of Rs. 1.02 crores. Thus, it is evident from the above example that you need to invest Rs. 25,000 per month for the next 15 years to meet this goal. This time horizon might change based on the rate of returns your investment generate as well as the amount you invest. It is safe to assume that your income will increase with time and you will have more spare funds to invest. So, you can achieve this target sooner than expected as well. Here are some essential points that you need to consider while developing a financial plan to make 1 crore from your investments in 15 years.
Manage your expenses: It is crucial for you to honour your present financial commitments as well as save for the future. You must, therefore, cut down on unnecessary expenses and try to save as much money as possible. Cutting down on wasteful expenses will allow you to spare more money for investment.
Andro Ferraro 