When a middle-class person thinks about making money, the biggest question is how to build substantial wealth for the future. Creating a fund of millions seems difficult amidst limited income and rising expenses. However, financial expert and chartered accountant Nitin Kaushik believes that with discipline in saving and investing, even an average earner can build a net worth of over ₹1.2 crore in 10 years.
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Not Just a High Salary, Right Decisions Are Crucial
According to Nitin Kaushik, a high salary is not the only requirement for becoming wealthy. The real difference lies in how you manage your money. Those who stick to the right investment options for the long term and make decisions based on planning rather than emotions are the ones who gradually build a strong financial position.
Start with Clear Financial Goals
The first step for any family should be to define their financial goals. Parents who are focused on their children’s future should start investing as soon as the child is born. If approximately ₹10,000 is invested every month in index fund SIPs and PPF, a fund of around ₹60 lakh can be created in 15 years. The average 12 percent return from mutual funds, combined with the security and tax benefits of PPF, provides significant advantages. Starting early makes compounding your greatest strength.
Consider Investment Balance Before Buying a House
Every family dreams of owning their own home, but a large home loan taken in haste can increase financial pressure. Nitin Kaushik advises that it is wiser to continue investing while living in a rented house, so that at least 25 percent of the property value can be accumulated as a down payment. It is also better to take a shorter-term home loan of 10 years instead of 20 years. If the EMI is limited to 35 percent of the income, the interest burden is reduced, and mental stress is also minimised. Don’t Neglect Retirement Planning
Most salaried individuals rely solely on EPF for retirement, but this may not be sufficient for the future. According to Nitin Kaushik, it’s crucial to increase contributions to the NPS alongside your earnings and start a separate SIP for retirement. With proper planning, a retirement fund of Rs. 30 to 35 lakh can be built in 10 years, protecting against inflation and uncertainties.
Controlling Expenses is the Real Strength
More important than earning more is developing sound spending habits. Avoid unnecessarily increasing lifestyle expenses. Simple tools like spreadsheets can be helpful for tracking expenses. Celebrating small financial milestones, such as completing the first significant amount in an SIP or paying off a portion of a loan, helps maintain motivation.
How to Build a Net Worth of Crores in 10 Years
By adopting all these disciplined approaches, an average family can build substantial wealth in 10 years. Savings of approximately Rs. 70 lakh are possible through mutual fund investments, around Rs. 28 lakh through secure options like PPF, EPF, and NPS, and up to Rs. 8 lakh through emergency and fixed funds. Additionally, an extra benefit of around Rs. 15 lakh can be gained from the appreciation of property value and reduction in loan principal. Even if the remaining home loan amount is approximately Rs. 22 lakh, the net worth, after deducting all liabilities, can exceed Rs. 1.20 crore.