Yes, it a secret which needs to be shared with everyone and all it takes is Regular income and right investments. The parameters which can it possible are:
- Amount Invested
- Rate of Return on investment
- Investment horizon
A disciplined approach to regular saving and investing wisely in the right instruments and results will be big returns. A simple Mantra is Saving of just Rs. 5,625 a month and investing it at the right place yielding 12% return can make you a Crorepati within 25 years.
Amount Invested
The sum invested regularly add up to your corpus of investments. As such, just a Rs. 1000 more per month adds up Rs.12000 per year and about Rs. 3 lacs in 25 years. As such just by increasing Rs1000 per month, which means is to avoid eating out once or twice a month, can add a substantial sum to your capital.
Rate of return
The Return on your Investments every year is what will determines the pace of growth for your money. Higher the return, the more money you will make. Your target should be to find an investment option that will give you the good returns with required safety. Since higher returns come risks, hence, you need take a balanced approach to decide on the level of quantum of risk you are willing to take on your investments. It goes even without saying that returns on low risk investments yields lower returns than that of risky instruments. Making a right mix will be a good alternative.
The asset should be allocated keeping in mind to maximize returns withing the stipulated level of risks. Not all eggs are to be put in one basket as such distribute your investments among stocks, commodities, gold (taking higher risks) and bonds, fixed deposits (lower risks) to get results as per your desire. As such, even in case of failure of asset class, the other will make up for the losses.
Investment horizon
The more is the time of your investment, the more it grows with the help of power of compounding. As such, Investments for longer terms assures that your returns on invested money gets reinvested adding to returns to your account and increasing the overall Returns.
As such with an early start, the growth of your money increases significantly, in some cases even multiple times. Each year not only add to your principal but also allows you to earn return over entire capital.
