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How To Build A Rs 2 Crore Fund With A Salary Of Rs 50,000? Here’s The Plan
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Rising salaries should match rising SIPs, boosting fund growth and speeding financial goals. But stopping or withdrawing SIPs can shrink the fund and slow progress
Investing more than 20% of the monthly salary and redirecting annual bonuses to investments will expedite fund growth. (Representative/Shutterstock)
Individuals earning a monthly salary of Rs 50,000 can potentially build a substantial fund of Rs 2 crore through disciplined financial planning and investment. This seemingly challenging task can be achieved by adhering to a structured budget and consistent investment strategy.
The key is to manage spending wisely and allocate a fixed portion of the salary towards investments each month. To accomplish this, it is crucial to follow the 50-30-10-10 rule, which recommends dividing the salary into four parts for essential expenses, hobbies, savings, and investments.
For example, with a salary of Rs 50,000, Rs 25,000 (50%) should be allocated to essential expenses such as rent, utilities, children’s education, groceries, transport, and EMIs. These expenses are vital and must be prioritised.
Next, Rs 15,000 (30%) should be spent on hobbies and lifestyle activities, including outings, movie nights, online shopping, and dining out. This expenditure helps maintain a balanced and enjoyable life.
The third segment, Rs 5,000 (10%), should be dedicated to investments. This involves placing money in avenues like mutual fund SIPs, the stock market, gold, or PPF, where it can grow over time.
The final 10%, Rs 5,000, should be reserved for an emergency fund and insurance, offering a safety net during medical emergencies or unexpected expenses.
How Will The Rs 2 Crore Fund Be Raised?
To build a fund of Rs 2 crore from a salary of Rs 50,000, disciplined investment is essential. If Rs 5,000 is invested monthly in a mutual fund with an average annual return (CAGR) of 12%, it can grow to Rs 2 crore in approximately 31 years.
However, this timeline can be shortened. By starting with Rs 5,000 monthly and increasing the investment by 10% annually (Step-up SIP), the fund can reach Rs 2 crore in roughly 25 years with the same average CAGR of 12%.
Why Step-up SIP Matters Most
It is important to note that increasing investments annually as salaries rise accelerates fund growth, enabling quicker achievement of financial goals. Continuous investment is crucial; withdrawing funds or halting SIPs can diminish the fund’s size. Additionally, term and health insurance should be considered to safeguard investments against major financial setbacks.
For those aiming to achieve Rs 2 crore more swiftly, cutting back on expenses and increasing the investment amount is necessary. Investing more than 20% of the monthly salary and redirecting annual bonuses to investments rather than spending them will expedite fund growth. The earlier and more consistently investments are made, the faster the desired financial target can be reached.
September 15, 2025, 17:38 IST
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