Kaun Banega Crorepati: A step-by-step guide to building a corpus of crores by the time you're 60

Don't let the myth that you need to earn a lot of money to be financially freehold you back. With the right plan and a little bit of discipline, you can achieve your financial goals.

Many people believe that financial freedom is only achievable by earning a high income. However, this is not entirely true. Planning, starting early, and being disciplined are more important factors.

An individual should be ready to invest at least 30 per cent of their take-home pay to achieve their financial goals. Investing 10-20 per cent of your income will not be enough to build a corpus that can support you in your retirement years.

One of the preferred routes to achieve financial freedom is by investing in mutual funds through systematic investment plans (SIPs). SIPs allow you to invest a fixed amount of money every month, which helps you to average out the cost of your investments. This is especially beneficial in volatile markets.

The mutual funds industry has seen a surge in SIP inflows in recent months. The mutual funds industry recorded an all-time high of Rs 15,245 crore in SIP inflows in July 2023, up from Rs 14,735 crore in June. Additionally, an impressive 33.06 lakh new SIPs were started in July. This is a positive sign and indicates that more and more Indians are taking their financial planning seriously.

If you are serious about achieving financial freedom, then you start investing in mutual funds through SIPs. This is a proven way to build wealth over the long term.

7K/month, crorepati in sight

If you start investing Rs 7,000 every month from August 2023, you will have invested Rs 25.2 lakh over 30 years. Assuming your portfolio grows at 8 per cent per annum, you can accumulate a corpus of Rs 1 crore in 30 years. This is the power of compounding, which allows your money to grow over time.

If your investment portfolio has some exposure to equities, and if it grows at 10 per cent every year, you could manage a Rs 1 crore corpus in 30 years even by investing Rs 4,800 monthly.

However, if you start investing later in life, you will need to invest a larger amount every month to achieve your financial goals. For example, if you start investing Rs 17,400 every month starting at the age of 40, you can still accumulate a corpus of Rs 1 crore in 30 years, assuming your portfolio grows at 8 per cent per annum.