Building your wealth to 10 crore may look quite intimidating, is it really possible? Long-term wealth growth is key to securing financial independence, allowing you to live comfortably and meet your life goals without worry.
To build that kind of wealth, you will need to have clarity on your financial goals, make the right investments in various asset classes, and manage risks effectively. Saving regularly, planning your taxes efficiently, and reviewing your investments periodically are important too.
While these are the cliches that we all know about, there are a few other things as well that most people are not aware of. So, what are they? In this article, we are going to discuss such strategies and how they will be beneficial for you to generate wealth.
How to Grow Your Wealth to 10 Crore?
The financial goal of 10 Crore is challenging yet achievable with proper discipline and systematic investment. Here’s how you can do this:
1. Investing in Stock Market
Investing in the stock market is a great way to build your wealth. You can invest in various types of stocks like blue-chip stocks, dividend stocks, etc. that have historically known for 15-20% CAGR, in addition to dividends and bonus.
Diversifying your portfolio among different sectors and industries helps minimize risk and increases potential return on investment. Also, following trends in the markets as well as upcoming IPO will give you an opportunity to invest in newly established businesses with great potential right out the gate.
2. Mutual Funds and SIPs
When investing in mutual funds via SIPs, the key is to always start early. For eg: A simple monthly SIP of 30,450 at 15% CAGR would be worth 10 Cr after 25 years. This concludes that a mutual fund investment is a systematic and disciplined way to grow your wealth. One effective method is through a SIP (Systematic Investment Plan), where you make fixed contributions at regular intervals (monthly or quarterly) rather than a lump sum.
This approach helps lower your average investment cost by purchasing more units when prices are low and fewer when they are high, taking advantage of market fluctuations. It also leverages the power of compounding over time.
Your investments should align with your risk profile, investment tenure, and financial goals. By choosing the right mix of equity, debt, or hybrid funds that match your preferences, you can aim for higher returns while maintaining liquidity when needed.
3. Real Estate Investments
Real estate investments can significantly contribute to wealth growth through rental income and capital appreciation.
By carefully researching the market and selecting properties in locations with high growth potential, you can maximize returns.
Real estate also offers the advantage of leveraging, where you can use borrowed funds to increase your investment capacity, potentially amplifying your gains over time.
4. Public Provident Fund (PPF) and EPF
Public Provident Fund (PPF) and Employee Provident Fund (EPF) are excellent long-term investment options offering tax benefits and guaranteed returns.
PPF allows individuals to invest a fixed amount annually, earning interest that is tax-free, while EPF is a retirement savings scheme for salaried employees, with contributions from both the employee and employer. Once you withdraw your PPF sum, investing in mutual funds or stocks or high return FDs can yield good returns.
5. Tax Planning
A money saved is money earned. Similarly, tax planning is crucial for maximizing your wealth growth by minimizing tax liabilities and optimizing your investments.
By utilizing tax-saving instruments like PPF, ELSS, and NSC under Section 80C, you can reduce your taxable income and benefit from tax deductions.
Efficient tax planning involves strategically timing your investments and taking advantage of available exemptions. This approach not only helps in retaining more of your earnings but also allows your investments to grow more effectively over time.
6. Manage Debt Wisely
Managing debt wisely involves prioritizing the repayment of high-interest debt as quickly as possible to reduce the financial burden.
Strategic use of debt can be beneficial, such as taking a home loan for a property that appreciates in value, which can ultimately contribute to wealth growth. It’s important to avoid accumulating unnecessary debt and to maintain a healthy credit score, ensuring that any borrowed funds are used for investments or purchases that have the potential to generate returns or appreciate over time.
Conclusion
Reaching your 10 crore wealth goal is possible with patience and a clear plan. Staying focused on long-term growth and making smart financial decisions will help you build the future you desire.
The journey may have its challenges, but with consistency and discipline, you can achieve financial independence. Keep your goals in sight, stay committed, and watch your wealth grow over time.
Disclaimer: No Business Standard Journalist was involved in creation of this content