The income you earn a month must be utilized in an efficient manner by equally dividing your income for savings and managing your basic and daily expenses judiciously. Many people claim of giving higher returns by investing at lower amounts on a monthly or yearly basis, but the truth is most of them are just not proper and make false claims making people excited for their offers. So in such cases, you have to make the right decision in choosing an efficient option.
In this article, it has been explained how by saving just Rs 30 a day, you can become a millionaire.
Who is the best motivator for investors? What does he say about investments?
The best motivator for people who are interested in saving and investing is Mr. Warren Buffet, who started investing in stocks at the age of 11 itself and now we know his current position. He is considered one of the most successful investors in the world. So we must not lose hope and keep trying in the best avenues. Here for example if a person is of the age of 20, then it will be good if he/ she starts investing Rs 30 a day. So at the age of 60, they can become a millionaire.
On investing Rs 30 a day, for a month it will equal Rs 900 and this amount can be invested in one of the best and trustable avenues which are in the Systematic Investment Plan (SIP). Hence you can become a millionaire by investing Rs 900 a month in 40 years. Else another option for a person of the same age and of the same amount to be invested per month is investing in mutual funds, one of the most used and most trustable avenues assuming you will be receiving 12.5% of the average return.
To those persons who have crossed the age of 20, not to worry at all because even now you can start investing but at a little higher amount. So, here let’s assume you are 30 years old, then to become a millionaire or a billionaire (10 crores), one needs to start investing Rs 95 per day.
How can I reduce the number of years spent on investing? Is there any plan for it?
If you feel that investing for 40 years is a too long period, then you can invest in a Dividend Reinvestment Plan (DRIP) of mutual funds for 35 years with an average return dividend Reinvestment Plan (DRIP) of 12%. Other options available for saving or investing are investing in small or midcap funds instead of diversified mutual funds. In this, the risk is very high, the time limit is for less than 25 to 30 years but the benefit will be high. Here the proverb of ‘higher the risk, higher the returns’ comes true.
What is the least risk option available for investors?
One last option for saving is the Recurring Deposit (RD) option wherein you are ensured of full safety and preferably good returns on investment. In this, you have to firstly open an RD account in any of the banks and invest any specific amount of money every month, and assuming you will receive an interest rate of 9%, then in a period of 30 years, you can become a millionaire. Therefore, based on your income level and your risk-taking capacity, you can invest in any of the above 4 options mentioned. You can also go for any other options which you may feel worth your income.