Becoming a crorepati is generally a lifelong dream for most people, but it is not as unattainable as it may seem. Given the right combination of patience and commitment, you can easily hit the 1 crore mark before you choose to retire. Assuming you are just starting out in your career, this plan for the distant future requires a solid long-term strategy to help you achieve your objective.
However, chalking out a strategy is only one part of the process. It is the actual follow through that distinguishes wealthy investment gurus from aspiring investors. So, what are the steps you can take to reach this goal as early as possible? Let’s discuss them here.
1. Assess Your Present Situation
The first step is to map out the distance to your destination. So, before you start making any concrete decisions, first consider your current net worth. For example, if you already have a net worth of Rs. 20 Lakhs, and you are aiming to become a crorepati in 20 years, you need to invest an average of 13,000 per month at an interest of 8% per annum, to meet your target.
It is equally important to assess your age, income, expenses, and family situation at this point. This will allow you to set a realistic time-frame for achieving your goal.
2. Start Investing Immediately
Investments may be a secondary source of income, but they are the primary source of wealth creation. Once you have charted a fair timeline and a realistic savings amount, start investing the money immediately. The sooner you begin, the more time you will have to build a sizeable corpus for the future. This will result in one of two things – you’ll either be able to retire earlier than expected or save more money than planned thanks to the compounding effect.
3. Spread Out Your Investments
You can make smart decisions and investments, but that doesn’t guarantee it will be your big ticket to wealth. When it comes to creating a cache this big, you will need to take a fair amount of risk. Aside from real estate, which requires large capital, you should consider putting your money in mutual funds, retirement accounts, and ULIPs. The best ULIP plan is one that provides maximum growth opportunities and adequate coverage along with some much-needed flexibility. It is ideal for individuals who are willing to invest long-term. You can even buy ULIP online if you want to skip the hassle of physical forms.
4. Save First, Spend Later
Contrary to the norm that exerts ‘saving money after expenses are paid’, it is a better idea to do the exact opposite. First, save a fixed amount every month as per your goal, and then move on to your expenses. This will acclimatize you to the habit of setting aside a predetermined percentage of your income and help you live within the confines of a budget. That doesn’t mean you can’t indulge yourself once in a while, but remember, a target like 1 crore requires some sacrifices.
By taking these steps and focusing on your goal, nothing can stop you from becoming a crorepati before retirement and living the rest of your life in carefree comfort and luxury.