If you are earning Rs 25,000/- per month without any ancestral wealth, Can you become a Crorepati by savings?

Appears to be a very silly question and every one of us will laugh on this thought.

But before doing that please go through few facts below 

The wonder of compounding (in investing terms) is to make your money work, to transform it into a state-of-the-art, highly powerful income-generating tool. Compounding is the process of generating earnings on your asset's reinvested earnings. Compounding works on two basic premises: re-investment of earnings and time. 

Simply put, the longer time you leave your money to compound, the higher is the wealth you generate.

Savings of Rs 2500/- per month (Rs.30000 Per year) with 15% return will be worth Rs. 14998708/- (1.5 Crores)  after 30 years. Yes, this is not typing error. It will be worth Really 1.5 Crores. 

Here’s more Savings of Rs 2500/- per month (Rs.30000 Per Year) with 15% return will be worth Rs. 30400370/- (3.04 Crore) after 35 years. 

Please find the table below which shows returns on Rs 1000/- monthly savings will be worth after 25 years, 30 years and 35 years at different rate of returns.

Remember, in the example above I have not increased the savings amount per annum. Considering you start increasing the monthly savings by Rs 500per month at every anniversary, i.e. Rs 2500/- per month for first year, Rs 3000/- per month for second year and so on. 

In that your return will be Rs.1.59 Crores after 25Yrs, 3.36 Crores after 30Yrs and 6.93 Crores after 35 Yrs. It si not a joke and it is True at the rate of 15% compounding Return per Annum.

Sooner we start, more will be the returns and yield. If you invest later in life you will not be able to make use of the great “Power of Compounding” 

Numbers do look good when tabulated; however, it is indeed a Herculean task to translate them into reality! We often get tempted to break our savings to attain a lifestyle or meet exigencies. You may observe now that it is not just time and money that commands the direction in which your corpus grows; there is one more important parameter which determines the same Rate of returns. 

To achieve the best risk-adjusted returns, it becomes absolutely necessary not to put all your money in the same basket. Having a judicious mix of debt and equity is equally important whilst you embark on your journey to become a millionaire. 

 A simple Formula of your Money in Equity Vs Dept is 100-Your Age. (ie) If your Age is 30 then you can invest up to 70% in Equity Markets and when the age increases we have to reduce the portion of Investment in Equity markets.

Compounding only works if you allow your investments to grow over a longer period of time and if you breaks then you will not get higher return. 

Take a call now to invest in Equity Market and equity related instruments like ULIPs and Mutual funds depends upon your age for longer period. The Equity related instruments in given more than 15% compounding return in that past 20 Yrs.

For any Clarifications about Investments in Share Market, Mutual Funds, ULIPs and Other investments

Feel free to Contact: Lakshmi Sriraman

Mobile: 09392757680/09894229677, e-Mail: srilaks1@gmail.com