Rs. 1 crore may seem to be a quite big amount when you are still new to your earning life. Indeed the amount of Rs.1 crore is considered to be a big amount for almost all average earning people. Accumulating the huge amount of Rs. 1 crore requires a tested a tried strategy and being consistent with the same.
It is a common phenomenon that the salary of our first job always gives us the lowest salary of our earning life. But at the same time, our first job gives us the opportunity to accumulate the maximum fund for our upcoming life. In most of the scenarios, in our first job, we are not burdened with responsibilities. Hence it becomes the best time to invest and multiply our savings.
If your ambitions are as high as accumulating Rs. 1 crore in your first job then let me assure you that this ambition can be accomplished within just 5 years. Yes! You read it right. Though it may sound impossible, one can achieve this by following financial planning strictly. Let’s learn the tips and tricks that will be helpful in your journey towards accumulating 1 crore in your first job.
How to Earn Rs 1 Crore in the First Job
Before we start learning how to accumulating Rs. 1 crore, let us be clear that having 1 crore in your saving account or salary account in near to impossible in just 5 years. Here in this strategy, we will plan to have a net worth of Rs. 1 crore by the end of 5 years including all assets you own. Here are the tips to follow-
Increase Your Income
This is the fundamental lesson of being rich. Being stagnant with your income can turn out to be an obstacle to achieve your aim. Increasing income should be one of the prime focuses of your professional life. Excellent performance in your job place, finding a second source of income, working on weekends, freelancing are some of the ways to increase your income.
This is the task where you need to take the right steps at the right time. Choosing the wrong investment instrument is one of the most common mistakes done by new investors. Always remember the mantra that a mixed investment portfolio is always the best investment portfolio. An ideal Investment planning should include mutual funds, IPOs, share market, PPF, ELSS, retirement plan etc. The right distribution of money will make you take your steps toward fulfilling your dream sooner.
Don’t Ignore Your Tax Health
When you invest your hard earned money with the aim of becoming a millionaire in the next 5 years, you should never ignore the tax. The income tax may eat up a quite good amount of your returns on investment as well as from your monthly income. You can save the tax payable to the government by investing in tax saving investment instruments. By using the tax savings investment you can invest up to ₹1.5 lakh in a year which will be free from taxes.
Some of the options that you can choose from are:
- Public Provident Fund
- Equity Linked Savings Schemes (ELSS)
- Fixed Deposits
- Unit Linked Insurance Plans (ULIPs)
When you are determined to accumulate a corpus of as high as Rs. 1 Crore in just 5 years, you are to control your expenses. The overspending or spending in less meaningful things will lead you to invest less which in turn will make your dream go far from your reach. You can make smart moves to reduce spending by shopping during offers, making use of coupons, taking public transport etc. Saving a small amount daily can make your gather a quite big amount at the end of the month.
Along with everything else, don’t miss to buy insurance plans. Both life insurance and health insurance are necessary. Life insurance will give you life coverage whilst health insurance will safeguard your savings and investments at the time of medical emergencies.
Get Armored with Emergency Fund
Emergency funds are the first thing you are to have before you start investing. The duration of 5 years is quite long and one may face a number of unexpected incidents where you will be in need of some extra fund. Focusing only on investment and ignoring emergency fund may force you to pull out some money from your investment. So to avoid such situations, always be prepared with an emergency fund.
Big Dreams Ahead
The tips mentioned here are not the only ones that can make you a millionaire in 5 years. If you brainstorm, you will be able to find many more small yet useful tips to make your dreams come true. You can always take help of a professional investment advisor to guide you throughout your journey to accumulate Rs. 1 crore in your first job.