Guys, today I will tell you a story of my uncle who inspires a lot of young people in terms of building wealth. He started his professional journey in 1993 when he got an internship at Khaitan Electricals, New Delhi. During his initial days of internship, he relocated to New Delhi with a stipend of Rs.6000 per month. As he used to live alone, he couldn’t save much as most of his salary used to be spent on paying rent and eating food outside. Being a foodie, he used to shell out almost Rs.3500 every month on his food.
After a year of eating outside, he realized that he couldn’t save much from his salary. And it really gave him goosebumps as he had a family to support. After calculating, he broke down his expenses as under:
Breakfast: Rs.20*30 Days = Rs.600
Lunch: Rs.30 * 30 Days = Rs.900
Dinner: Rs.30*30 Days = Rs.900
Snacks in Between: Rs.1100
The very next day, after introspection, he started cooking at home. Believe me guys, till date, he cooks yummy fishes and paneer tikkas. After a month, when he calculated his expenses, he was amazed to see that he spent a paltry amount of Rs.1000 on his food. For the whole month, he controlled his taste buds and never ate outside. He saved a huge amount of Rs.2500 by not eating outside. This healthy habit of cooking at home reduced his health issues drastically.
And How Did He Grow His Net Worth By 50.57 Lakhs By Just Cooking At Home?
Well, the amount he started saving(Rs.2500) by not eating outside, he started investing it. Every month, he used to save this much amount and invest in a financial product (you’ll read more about financial products in my later posts). Starting from 1993 and till date, he invests the same amount every month. And guys, you won’t believe, a mere amount of just Rs.2500 has compounded his worth by 50.57 Lakhs at an annual rate of 14%.
Just have a look at the figures below:
Cook At Home and Build Wealth
At an annual rate of 14%, his monthly savings of just Rs.2500 built a huge corpus of Rs.50 Lakhs in a span of 24 years. The financial product in which he invested, gave him an annual return of 14%.
You might get lucky if you get a return between 16-21%. At 21%, your savings of Rs.2500 will help you accumulate a huge corpus of 1.30 Crores in 24 years. One of the financial products has actually given a return of 21.66% since inception (1993). Please look below for the figures:
Image Source: Value Research
An important lesson needs to be learned here that you don’t need a huge amount of money to build wealth. My uncle has proved that with a mere amount of money, you can build your wealth too. Nowadays, when people step into the earning stage, they start earning a huge amount of money but forget to save and invest. In order to build wealth, you need to save and invest.
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