Sky is the limit for someone with a solid plan and the motivation to work for it. This applies for personal finance also. If you can make a financial plan well and execute it sincerely, there is no financial goal that you cannot achieve.
Becoming a crorepati and retiring early from the rigorous work-life to pursue own hobbies is one of the dreams of many youngsters entering the job market today. Interestingly, the circumstances are more favourable for them now than their elders.
All the necessary investment tools and required financial education is easily accessible these days. Moreover, someone entering the job market in his/her 20s, has access to more cash due to higher salaries and generally less family responsibilities. They can use their surplus cash to achieve financial freedom (retire early and rich) at a very early stage of their lives.
“A good thing for most Gen Z entering the professional life is that they enter it when their families are stable and do not rely on their income, unlike their forefathers who had to make sacrifices in their education to take care of their family. This puts them in a unique situation where they are left with surplus cash which can help them achieve financial freedom and live a life their ancestors could only dream of,” Vikas Singhania, CEO, TradeSmart, told FE Online.
However, in order to do retire early and as a crorepati, youngsters need a disciplined approach. Following are some of the tips that a millennial entering their professional life should consider to build an impressive corpus:
A frugal lifestyle
Every rupee saved has the potential of helping you achieve your financial goal.
“Some of the richest people in the world live a frugal lifestyle. There is no end to the luxuries one can thrive for. Rather than chasing them at the start of one’s professional journey, it is better to wait, accumulate wealth, secure your future and then buy all the luxurious stuff you want,” said Singhania.
Start saving systematically
Experts suggest that you should save as much as possible and start investing systematically as early as possible.
Anyone starting his/her investment journey early has an edge because of the compounding effect such investments generate.
For anyone starting their professional life in their early 20s, the path to achieving their financial goal starts from the day they receive their first salary cheque.
“Charting a path for financial freedom and having the discipline to stick to it is all that is needed to be financially free and happy,” said Singhania.
Remember 15-15-15 rule
You should remember the 15-15-15 rule to become a crorepati.
“All you need is Rs 15,000 to be invested every month for 15 years in an instrument that yields 15 percent per annum to reach the Rs 1 crore target,” said Singhania.
And most importantly, get insured
The earlier a medical and life insurance is taken the better.
Even if there is no liability, a term policy will help secure the future of the family in case of an unlikely event. Getting insurance protects them from a financial shock in case of a sudden hospitalization of a family member.