How to Become a Crorepati: Due to financial constraints and limited income, many people believe that they will never be financially independent. Gradually, this belief becomes so ingrained that they give up trying to improve their financial situation. But the truth is that becoming rich doesn’t begin with savings or income, but with a change in mindset. When a person adopts a positive attitude and values small savings, the path to financial independence becomes clear. With this mindset, even small changes in daily habits can create a substantial corpus. For example, by giving up just two cups of tea, you can accumulate crores of rupees.
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How to Save by Giving Up Tea
Tea drinking is a common habit in India, and many people drink it multiple times a day. The typical cost of a cup of tea is around ₹10. If you stop drinking two cups of tea daily, you can save ₹20 daily. This savings translates to ₹600 per month. If this same ₹600 is invested in a mutual fund SIP, it can grow miraculously over the long term. Regular investments in mutual funds are believed to yield an average annual return of 15%, which exponentially increases the fund over time.
How to Build a ₹1.38 Crore Fund
If you continue a monthly SIP of ₹600 for 40 years, you’ll have a substantial corpus of approximately ₹1,382,002 by the time you retire. This amount is astonishing because ₹1,354,002 is solely interest income, while the actual investment is only ₹288,000. For example, if a person starts saving at the age of 20, they can easily become a millionaire by the age of 60.
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The Magic of Compounding
The real secret to this large fund is compounding. Compounding earns interest on interest, allowing the investment to grow rapidly. The beauty of SIPs is that they fully leverage the benefits of compound interest. Small savings can grow into such a substantial sum because the investment is continued over a long period of time, earning interest continuously. The earlier you start investing, the larger the corpus.