How to become rich with Salary: If a 21-22-year-old youth starts saving at this age, then at 45-46, he can make a retirement plan and spend the rest of his life comfortably.
Who does not want to become rich in our society? Every person wants to earn as much money as soon as possible to fulfil his needs. He/she also wants to save money so much that there is no need to work again.
Many people also believe that business people want something similar to this. To get rid of the stress of business, they also want to earn as much as soon as possible and keep it in the safe so they can get free time from chik chik and jhik jhik. Overall everyone wants to become rich.
How to become rich with 20K Salary?
What to do to become rich. Is there any formula? If so, what is it? Many see that their neighbour, friend, or acquaintance has become rich and lives comfortably.
There is another belief in society that salaried people cannot become rich. Only the expenses are met from the salary you received. It is also believed, and it is also experienced in everyday life. And in business, money keeps following.
It is said that only a businessman can or would have become rich. But we do not agree with this here because some people do not always go according to the direction of the wind; they want to do something different in life, want to achieve, and want to become. Such people do their planning on time.
Whoever tries to conduct this planning early on will reap the rewards. Timely wage costs can be eliminated with careful budgeting. Most importantly, no one can prevent a person with a salary from becoming wealthy if he lives sensibly.
How to create Wealth? The formula for wealth creation
Saving is the most important formula for wealth creation. You save half of your salary. Often we see young people start saving late, which is also called savings in common parlance. Here the biggest mistake of life happens. This mistake keeps him trapped in that vicious circle for his whole life, called expenses due to salary.
The master of savings says that if a 21-22-year-old youth understands this, he can do wonders. If you start saving at 21-22, you can retire after 25 years. That is, at 45-46 years old, he can plan for retirement and spend the rest of his life comfortably.
What is the Rule of Money?
After all, what should young people do? This is the biggest question. What should be done so that this can be possible? So let’s understand. If a youth’s salary is 20 thousand rupees a month, in that situation, wealth creators say that the youth must follow the 50-30-20 rule of money. It means only this.
A person has to set a limit to spend 50% of his salary on basic needs. In any case, he has to settle his needs within this limit.
With 50% of your salary, you can pay your rent, EMI, bread, cloth, house, electricity bill, internet, phone etc. He has to remember that something should be saved from luxury also. It is clear that if his salary is Rs 20,000, he can spend Rs. 10000/- on such basic needs. This amount is not less than Rs 1,20,000 annually expenditure.
The second part is 30 per cent of the salary. In this scenario, when your salary is only 20 thousand rupees, 30% of 20k would be Rs. 6000/-. And this will be 72000/- rupees a year.
Think about it and see, this is not a small amount. But in the absence of planning, people go on to make mistakes. You can save this amount for future luxury needs, such as buying a car, an expensive mobile phone, a music system, clothes or other items.
But keep in mind that annual shopping expenses could not exceed more than Rs. 72000/-. Follow the formula; keep this in mind. The law of mathematics is not wrong.
And the third part is 20% of your salary, that is Rs. 4000/- per month. Here it is the most important thing that decides the pace of your whole life. There is a need to be careful here. A good planner should be consulted on this.
That is, if a youth starts saving Rs 4000 per month, i.e. Rs 48000 per year, it increases with his career progress. He can lead a comfortable life by taking early retirement.
Where to invest your savings?
Stocks, Savings Funds, FD, and Mutual Funds are better options where long-term investments give excellent returns. For this, you need to dig deep to understand the power of compounding.
That’s it for today. The power of compounding will be discussed further, and we will also tell you how people aged 30, 35, and 40 should do the planning.
- Learn the differences between fixed and floating interest rates.
- PNB account holders should do this immediately.
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