Tuesday, February 18, 2025

Retirement wealthy – a crorepati? Steps to create a handsome portfolio before retirement

Everyone wants to lead a happy, healthy and financially independent life after hitting the other side of fifty that is, at retirement. While some are fortunate, others inherit, but most people have to create their own corpus. The bad news here is – you are late. The good news is – you can start today.

(Retire) Wealth = Investment x Time

The buzz word that we have heard is Compound interest. In simple terms, compound interest means Interest on Interest. Using a simple calculator, you can see why the great Physicist Albert Einstein called Compound interest as the greatest thing for human race. In old village tales, some wise men used to say that investment is like a nail in the wall. It should only go inside, and never come out. Thats how wealth is created. When you allow your hard earned money to grow over a period of time.

History will tell you that if you start at the age of 18, you will retire with such a huge corpus which you cant dream of today. So, the rule number one to remember is, wealth is equal to investment multiple by time.

Retirement planning

The Big Mistake in Personal finance and retirement planning

By Starting late, you are commiting the biggest mistake. The portfolio building should start as early as possible. Second mistake is, people thing that they dont have enough to invest. The truth is, amount do not matter. Rules, discipline matter more.

Simple Retirement planning

Step 1: Save 30% of whatever money you earn.

Step 2: Find an investment guide. You can follow innumerable websites and look at mutual funds

Step 3: Break your saving in three parts

Step 4: Choose 3 mutual funds. Keep them broad

Step 5: Start SIP

Step 6: Increase the SIP by 10% each year

Just consider this: A monthly SIP amount of INR 1000 invested in a mutual fund started in 1997, became close to 50 Lakhs today. And this fund is not considered as the top fund. Do not say that you don’t have even one thousand to invest. The only thing between you and a wealthy future is inaction.

Disclaimer: Do not consider this as an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this platform being used for actual investments. Returns mentioned herein are in no way a guarantee or promise of future returns. Stock market investments are subject to market risks. Please take advice of your financial advisor before any investment.

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