If you are aged 25 Years & earning, you must definately understand the concept of FIRE
(Financially Independent Retire Early).
What does this mean?
At young age normally new generation prioritizes expenses and spending on Brands, Unplanned Travel, Long Week end spendings, Gadgets, Outings and so many other things
Why Not?
During first year of high paying job, you must experience everything that excites you and gives you satisfaction that yes you have arrived.
Offcourse you studied, good 20 years to reach where you have reached today and you should be infact proud of your achievements.
But this spending should be capped as you enter 2nd year of earning. Considering that Money is the name of game, inflation is on high rise, lifestyle expenses will be sky rocketing every day…..2nd year of earning should be treated as the year to learn & understand the difference between NEEDS n WANTS.
Any Difference in NEED & WANT?
Yes the same difference as it’s in Day & Night… While buying a White T Shirt for Sunday Match might be the NEED (this might cost you may be about a 1000 rupee) but going to Decathlon Store and bring useless stuff worth Rs. 7600 because it was available on Sale is an Unnecessary Want.
Any young Individual who has mastered the art of understanding the difference between the Needs n Wants has actually understood the game well.
What next?
Use the Rule of 30 x 25 x 15
As you spend 30 months (two & half years) into a high paying lucrative job, by now you have spent well on almost every good gadget available, you have gone on 5-10 trips with friends, you have bought 3-5 high value Air Tickets to manage unplanned travel, you have clearly understood the Difference between NEEDS n WANTS……start planning for tmoro now because you need to set few goals for yourself. These Goals may be like
👉Buying your first Car/SUV
👉Sending Parents on World Travel.
👉Setting your foot forward to buy your first Apartment.
👉Fixing a Date of Your Marriage
👉Charting out Travel Plans to start seeing the world.
One thing is very common with all these 5 Goals, they come at a cost (You need Rupee) to meet them all. More the money, better the Car, Better the House, Better the Travel and a lavish Destination Wedding…
This is the time to trigger the Saving Gun and start setting aside 30% of your Salary. If you are earning 1 Lakh a month, the amount will be Rs.30000/PM
This Rs.30000 has power to change the landscape of your Life Journey.
Say you started this journey at the age of 25 yrs and plan to retire at the age of 50….so your FIRE is set at 50 and you have good 25 years to Earn and Invest.
Once you have decided to park Rs. 30000 a month for your future goals, there comes the choices & expert advice from the ones who nurtured you to reach where you are.
Mind you, when your parents talk of putting Money in Post Office, Bank, PPF, there is nothing wrong they say because at their times Branding, Inflations, Wants, Malls, Online Shopping were not there. Before the year 2000, best of Salaries were in few thousand. Neither were hefty pay packages nor were these unnecessary expenses on Mobiles, Gadgets, Outings etc.
Someone says Post Office, others advice on PPF, there comes an expert guidance of Bank RD and so on…..understand these 4 real time situations below.
Rs. 30000 every month put aside in different instruments for next 25 years in difference Saving/Investing institutions will look as below
👉Invested every month in Post Office will be Rs 2.44 Cr at the age of 50
👉Invested in Bank RD every month will be Rs 2.31 Crore
👉Invested in a Traditional Insurance Policy of LIC or any other company every month will be Rs 1.66 Crore
👉Invested in PPF account would mean 2.77 Crore
👉Invested in Diversified Equity Mutual Funds every month at a moderate rate will be Rs 9.85 Crore
If you are a smart Investor and keep increasing your SIP contribution by 10% every year as your income grows….hold your heart, your maturity value at the age of 50 will be Rs 19.74 Crore
Dive deep into the knowledge pool, Read blogs, watch YouTube videos, attend Investment Seminars, take expert advice, choose the one you can count on and start your investment journey, because in the game of Power of Compounding tmoro will be too late.
A Personalized plan is always a better way to start your Investment journey, where ever you are, friendly advice is just a call away @ 9501017769 or you may write us back at 9501017769.kamal@gmail.com
They say good things should start well in time, why delay?
Kamal K Sharma is a Financial Professional & Author to the bestseller The Piggy Bank Billionaire.
