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Grow Old Rich, Start Today!

Wealth creation refers to increasing your investments while simultaneously reducing your debts in the long term.<br>

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Grow Old Rich, Start Today!

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  1. Grow Old Rich, Start Today! Most people worry about significant expenses in the future, like buying a car, funding marriages, spending on health and life after retirement. You may worry about having enough funds to support your needs while improving your standard of living. A straightforward solution to this is long term wealth creation. The process of wealth creation is not a fast and easy process. It takes consistent efforts over a prolonged period. You must follow a pre-decided plan of action. Read on to know more about how you can successfully set yourself up for a comfortable retirement. Wealth creation and the importance of starting early Wealth creation refers to increasing your investments while simultaneously reducing your debts in the long term. You can invest in various asset classes to fulfill your personal goals. To gain the most benefits, it is paramount that you start investing early. Let us take an example. Assume Mr. X is currently 25 years old and earns an income of Rs. 2 lakh per month. X spends Rs. 1.75 lakh and saves or invests the remaining Rs. 25,000 into various schemes. X plans to retire at the age of 60 and hopes to live up to the age of 80.

  2. Now, if X gets a yearly return of 7% on their investment (compounded annually), their retirement corpus at the age of 60 would be approximately Rs. 4.4 crore. If you assume that this Rs. 4.4 crore is not further invested, Mr. X would have a monthly income of around Rs. 1.86 lakh for monthly expenses till he turns 80. As a thumb rule, your monthly income after retirement should be about 80% of your monthly income before retirement. Now, consider another person Mr. Y. His financial profile matches exactly with X, but he started investing around the age of 35 instead. At the age of 60, his retirement corpus would be just a little over Rs. 2 crore. With this, Y’s monthly income turns out to be around Rs. 85,000 till he turns 80. This is significantly less than his pre-retirement monthly income. Here, a ten-year difference has yielded a difference of over Rs. 2 crore between the wealth of the individuals. This is why the earlier you start investing, the better it is for you in the long term. Read more about wealth creation

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