For most young men and women starting out on your first job, the common goals most finance guys talk about – retirement, children’s education etc are only a vague thought too far away to worry about.
To you, I propose a simpler challenge: Save Up One Lakh Rupees.
Why one Lakh- besides the fact that it has a nice ring to it?
Because it’s a lot of money and here’re a few things you can do with One Lakh.
#1. It’s your emergency fund – 3-4 months of your salary
#2. The on-road price of a good bike
#3. The price of an awesome pair of diamond earrings
#4. 2 times the cost of a 3 nights holiday in Singapore
#5. An expensive watch for your dad or jewellery for your mom – or both
And, here’s how you get from Zero to One Lakh – in just 18 months:
Year 1: Save Rs. 5000 per month and invest in low risk debt funds or a boring old Recurring Deposit. By the end of the year you would have reached 2/3rd of your goal.
Year 2: Increase your savings by 10% and keep investing in the same Liquid Fund or Recurring Deposit for another six months.
In just eighteen months you would have reached Rs. 1,00,000.

(assumes a return of 8.5% per annum. You might get a slightly lower return and it might take you a month longer – no more.)
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