Being a Millionaire (Wealth Building) is a dream for everyone, but what we don’t know is the beginning is very important and very affordable.
How to become a Millionaire?
There are several segments available in the financial market, to make your dream come true and bring you a achieve your goal.
- Mutual Funds
- Fixed Deposits
- Shares market
- Insurance & Ulip
Every Segment consists of different benefits for the investor.
If you are an Employee or a small businessman, We always spare some amount in Fixed Deposit, Insurance Premium and in mutual funds too after deduction of all expenses including EMI’s, Car Loan etc.
Implementing small changes in your investment pattern will definitely make you a Millionaire.
In my previous article: Is Term Insurance better than Life Insurance & Reasons to Drop Buying A House (Change your mindset), it is very clear to understand the concept of investment Platform.
In the above articles if you change the concept of understanding you will be a Millionaire without doing anything.
Start with Recurring Deposit
We all have heard of Recurring deposit, in this segment the sum amount of rupee every month at certain date deposited in a recurring deposit account and the investor will get the interest on quarter basis, at the end of the year or term declared before the opening of recurring deposit account.
The Investor will get the interest according to a Fixed deposit account.
Tells take an Example:
In the above example, if you invest ₹ 1000 every month on a certain date for example on 1st of every month, the sum amount along with interest (which is bifurcated into 12 months), if the interest rate is 6 %, you will get 0.5 % every month, is carry forwarded to next month.
The amount received from the end of the month and the amount fresh invested will again get the interest cumulative.
At the End of 12 months, you will get ₹ 12397 after investing ₹ 1000 per month.
If you want to be a Millionaire just by investing ₹ 1000 per month, the amount of ₹ 12397 needs to be invested in a different pattern in Mutual funds on yearly basis (SIP).
If you take the amount received every year from recurring Deposit and invest it in Mutual Funds on yearly basis for 25 years considering interest rate 10 % per annum which is considered as defiant return according to the history of Mutual Fund, you can also read Benefits of Investing in Mutual Funds for more about Mutual Funds.
In the above example, after 25 years of smart investing of ₹ 1000 every month, you will get ₹ 13 Lakhs and you will be a Millionaire in just 23 rd years of Investment. Save 1000 a month for ₹ 25 years, you have the result.
Be smart and start investing.