Building a corpus of over Rs 1 crore with a salary of Rs 20,000 per month is challenging but achievable with disciplined saving, prudent investment, and time. Here's a rough calculation on how it could be done:
Savings Rate: Let's assume you can save 20% of your monthly salary, which is Rs 4,000 (20% of Rs 20,000).
Investment Return: Assuming an average annual return of 10% from your investments. This is a reasonable assumption considering a diversified portfolio of stocks, bonds, and other assets over the long term.
Time Frame: For simplicity, let's assume a time frame of 30 years. This allows for the power of compounding to work effectively.
With these assumptions, let's calculate:
- Monthly Investment: Rs 4,000
- Annual Investment: Rs 4,000 * 12 = Rs 48,000
Now, let's calculate the future value of these investments after 30 years:
makefileFV = PV * (1 + r)^n
Where:
- FV is the future value of the investment
- PV is the present value (annual investment)
- r is the annual interest rate (as a decimal)
- n is the number of years
Plugging in the values:
cssFV = 48,000 * [(1 + 0.10)^30]
makefileFV = 48,000 * (1.10)^30
FV ≈ 48,000 * 17.449
FV ≈ Rs 837,552
So, after 30 years of consistently saving and investing Rs 4,000 per month with an average annual return of 10%, you would accumulate approximately Rs 8.37 lakh.
To reach a corpus of over Rs 1 crore, you would need to increase your monthly savings amount, extend the investment period, or aim for higher returns on your investments. Additionally, it's crucial to review and adjust your investment strategy periodically to align with your financial goals and market conditions.
