As seen from the calculation, assuming an interest rate of 8% per annum, you would need a monthly SIP of Rs 8,000 to reach your goal. According to industry trends, for a short-term tenure of one year, SIPs have given returns of 8-10% per annum.
Investing can amplify wealth creation through returns on principal capital. Popular options like fixed deposits, recurring deposits, mutual funds and the provident fund come with varying degrees of risk and reward.
It is also important to focus on one’s skills to raise one’s income. This will also allow you to invest a larger amount in different instruments, thus increasing your wealth. It is also important to cut down on unnecessary expenses.
For example, if you manage to save Rs 5,000 from your salary and earn an additional Rs 3,400 per month through freelance work, you meet the Rs 1 lakh target without needing any market returns. This is because this would amount to an income (Rs 8,400 x 12) of over Rs 1 lakh.
The journey to accumulate Rs 1 lakh in a year is about discipline and consistency. Becoming a lakhpati in 12 months is certainly possible for many Indians with focused budgeting and prudent investing. However, it requires realistic planning and avoiding shortcuts like get-rich-quick schemes.
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