Yes, you read that right! A crore of rupees and that too by 'saving'.
Everyone will tell you that you can't save a crore – you must make it by doing some sort of business. Or, as several commenters, on our twitter stream and blog believe – by wrongful means. The disbelief is not unreasonable. After all, only a mere 0.3% or one third of one percent of Indians – can lay claim to having more than 60 lakhs in total assets (and not in financial assets but a mix of real estate, gold, and financial assets).
Depending on which data source you choose there are a total of 1.8 Lakh to 2.36 Lakh dollar millionaires in India (Credit Suisse Report) or people who own at least Rs. 6 Crores. These are also individuals who are most likely to have Rs. 1 Crore in financial assets. That would be the population of a very exclusive town.
But, we are going to show you how even hard working salary earners like you and me can "save" a crore.
Year 1: Save Rs. 5,000 per month and invest in Equity funds.
Year 2: Increase your savings by 15% annually, to Rs. 5,750 per month (We're sure you'll get a salary hike!) and invest it in Equity Funds again.
Year 3- 17.5 : Again increase your savings by 15% every year. So, Rs. 6,612 in year 3, Rs. 7604 in year 4, and so on.
At the end of 17 and a half years you would have reached your first crore. So if you start this at age 25, before your 43rd birthday you would be a crore-pati.
If you think this is too fantastic and want to try out whether this works, give our millionaire plan a try.
Note: The data considers a historical rate of return of 14%, which is what most people get from equity mutual funds. If the funds are good, then the return can be much higher. We have taken a conservative estimate here.
Your corpus WILL fluctuate with market movements. There will be periods where you will see dips. That's OK. The 16 year period is more than enough in most cases to take care of such fluctuations and balance out bad years and good years. (Using Scripbox for this has the added advantage of a yearly portfolio review)
Who said patience doesn't pay! What's more, you would have done this legally, without any of this money being "black" and with this money being in some of the most liquid and tax-free investments.