Investment / A salary of 1 lakh will create a fund of 1 crore, this is the right way to invest

Investment: Earning and saving your earnings are two very different things. You must have often heard people say, "I earn so much, but nothing is left at the end of the month." But, if your monthly salary is Rs 1 lakh, then with the right strategy and discipline, you can raise up to Rs 1 crore in 10 years. For this, you have to make a strong investment plan and implement it continuously.

How to achieve the target of Rs 1 crore

It is not impossible to create a fund of Rs 1 crore in 10 years, provided you do the right planning. For this, you have to invest a fixed amount every month, which will grow over time through compounding. Suppose you invest in equity mutual funds, where an average annual return of 12% can be obtained. According to this return rate, you will have to invest about Rs 44,000 every month. If your monthly income is Rs 1 lakh, then this will be half your income. It may seem difficult initially, but it is possible with smart spending and planning.

Manage expenses

When we earn more, we are often attracted to a luxurious lifestyle, like eating out frequently, buying new gadgets, or going on expensive holidays. But remember, every rupee saved today earns you money in the future. Limit your essential expenses to 40-50% of your income. Save 10% for an emergency fund, and invest the rest. Financial experts advise: invest first, then spend.

Choose the right investment option

It is important to choose the right option for a 10-year investment. Equity mutual funds and index funds are considered the best to beat inflation and give good returns in the long term. These options come with risk, but in the long run the risk reduces and the chances of returns increase.

Keep increasing SIPs

As your income increases, increase your investments too. Increase your Systematic Investment Plan (SIP) by at least 10% every year. For example, if you start with Rs 50,000 per month and increase it by 10% every year, the magic of compounding will help you reach your goal faster. This will not only help you reach Rs 1 crore sooner, but will also reduce the pressure of investing in the future.

Monitor your portfolio

Check your investment progress at least once a year. If needed, rebalance your portfolio, i.e. adjust the funds according to your strategy. However, avoid making frequent changes, as discipline, not constant manipulation, is the key to wealth creation.