Financial Planning For Low Income: Sometimes even small investments can give you a big corpus. Often people feel that, if their income or salary is very low, then they cannot make corpus worth crores of rupees. But there is not much truth in this.
If you choose the right investment option regularly, you can build a sizeable corpus. For example, if your salary is only Rs 20,000, you can become a millionaire by using the formula 50-30-20. Let us know how this formula can make you a millionaire….
What is 50-30-20 formula?
In the 50-30-20 formula, you have to divide your salary or income on the basis of expenses. 50 percent of the salary is spent on meeting house rent, food bills and other needs. Out of the remaining 50 percent, 30 percent has to be spent on entertainment and hobbies.
At the same time, invest the remaining 20 percent. For example, if your salary is Rs 20 thousand, then 20 percent of it is Rs 4000. In such a situation, you can start your investment journey in Systematic Investment Plan (SIP) with this Rs 4 thousand.
How can one become a millionaire with a SIP of Rs 4,000?
If you start a monthly SIP of Rs 4,000 and get an average annual return of 12 percent, then after 28 years this small investment can become approximately Rs 1.38 crore. However, investing in SIP depends on the market. Therefore, change in returns is also possible.
Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)
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