Make Your first ₹1 CRORE with this 3 Practical Ways | Compounding | Mutual Funds #Finance

A common financial target for many people is to grow ₹1 crore. How to add this ₹1 crore practically, why is it difficult to add only the first ₹1 crore, but then easy to add an extra ₹1 crore or even more? Let’s discuss these today with detailed practical data. Greetings! My

name is Boosan. You’re watching "Finance Boosan". Let’s start directly from the solution. Assuming ₹16,000 per month, if we make an investment of 15% return for the

next 15 years, we can grow ₹1 crore. In fact, we can grow more than that. To repeat, if we make invest ₹16000 monthly on 15% return for the next 15 years, we can grow more than 1 crore. This is not an ideal solution. We will see the ideal solution in a while. But in this approach, 2 important

questions arise. 1. What is the investment that gives 15% return consistently? 2. Even if we grow ₹1 crore, will lot of money go to tax ? Let’s address both these themes. First, for taking a return of more than 15%, we need to do Equity based investment. When we say

Equity, it means investing in a stock or stock-based mutual fund. If we take the Mutual Fund route, there are more than 2500 Mutual Funds listed in India. We need to filter the Mutual Funds that give consistent long-term returns. We can go to the "tickertape" website and

check the Mutual Fund screener. Here we have atmost 10 years of CAGR data, we can filter using this 10 years CAGR data. We can also see Mutual Funds that gave more than 15% returns. There are more than 190 Mutual Funds in that list. In fact, most of the Mutual Funds here… have given more than

20% returns in the last 10 years CAGR. Not just 10 years, even if we look at 20 years of SIP returns, many Mutual Funds have given more than 15% returns. Means, we can take more than 15% returns from Mutual Funds. This is a practical approach. But if you still don’t have much confidence in

Mutual Funds, thinking how can they give consistent returns, if you feel that you can trust after seeing someone’s 7-8 years actual data , I have already shared my Portfolio on this channel. I’ll give you the link for that. Check it out. So, practically, there are

Investments that give more than 15% returns. Now, let’s address the second question about tax. Let’s take an example for that. We have invested a total of ₹29 lakhs, and have received a Profit of ₹79 lakhs. Usually, in India, 10% tax is collected

for the Profits we get in Equity. So, here we won’t get any tax for our ₹29 lakhs. If 10% tax is collected for that ₹79 lakhs, we will be paying a tax of approximately ₹8 lakhs. Even if we subtract that tax from the total returns, we will still be

having more than ₹1 crore with us. I have considered ₹16,000 extra for this taxation. In fact, if we add 15,000 rupees for 15 years on 15% returns, we can achieve ₹1 crore. So, we have addressed both the major concerns here. 15% returns are practically possible. Even after tax, we will still

have ₹1 crore in hand. Apart from this approach, there is another straightforward approach. If you already have a lump sum of ₹13 lakhs, and if you invest it today in a fund that will give 15% returns, it will automatically grow to ₹1 crore after 15 years. So, you don’t have to invest

anything every month. If you already have a lump sum of ₹13 lakhs, then you can practically grow ₹1 crore rupees. But many people mightn’t have a lump sum of ₹13 lakhs. In fact, it will be difficult to invest ₹15,000 every month. For them, the step-up approach will be correct. Here,

everything will be similar. The same 15 years and the same 15% returns. But, instead of starting with ₹15,000 , we will start investing from ₹10,000 every month. For a year, we would have been investing ₹10k every month. But, when the next year comes, we will have stepped up this ₹10,000 to

₹11,000 . That is, our Income will increase every year. As our Income increases, our Investments will also step up by 10%. That is, for the first year, we would have invested ₹10,000 . Next year, we would have invested ₹11,000. The next year,

we would have invested ₹12,000. If we continue like this for 15 years, we can add up to ₹1 crore. So, if we invest ₹10,000 every month, we can add up to 1 crore rupees. But, if we say that we cannot add up to 10,000 rupees and our Income is low, then that is the first thing

we will address. There are two obvious ways for this. One is to take the right steps to increase our Income. We can improve our skills and try to earn more at our workplace. Or else, we can do something else… and create more Income and invest this ₹10,000 .

Or else, the second approach is to reduce our expenses. We can track where we spend every month using an expense tracker and identify where we can reduce, where we are spending uselessly, and identify where we can invest extra. Check the tracker template of how I track my expenses using the link

given. In the plans we saw, it seemed like it would take 15 years to grow the first ₹1 crore. But, it will take only 4 years to add up to the next ₹1 crore. Usual saying is that rich get richer, money makes money. We can see that practically here. The same ₹10k, 10% step up, and 15% return

for 15 years for making ₹1 crore. Instead of 15 years, if we say 19 years, and add 4 extra years, we can add more than ₹2 crore. That is, it took 15 years for the first ₹1 crore. We have added the next ₹1 crore in just 4 years. In fact, if you extend it for another 2 years, we can add

another ₹1 crore as well . After this, we will get returns of more than ₹1 crore every year. The main reason for this is compounding. Compounding means… We get a growth, and after that growth, we get another growth. For example, assume you have ₹1 lakh. You have invested it in something

that gives 10% returns. Now, if this ₹1 lakh grows by 10%, you will get a Profit of ₹10,000 . If you withdraw this ₹10,000 and use it, then you will have only ₹1 lakh again. If you invest this next year and grow it by 10%, you will again get the same ₹10,000

Profit. Again if you use it, you will have the same ₹1 lakh left. You will get a Profit of ₹10,000 every year. But if you reinvest the ₹10,000 , you will have ₹1.10 lakh. If you invest this and get a 10% return, you will get a Profit of

₹11,000 . If you reinvest this again, your Profit will increase every year. This is compounding. If you reinvest your growth and grow it, that is compounding. But to achieve this, we need to do 2 important things. First, we need to be disciplined and consistent. When we say

disciplined, we might have started a investment for a goal. But tomorrow, if trading or speculative asset category is very popular and if we go out of this to participate in that, then we cannot achieve this. We need to approach this consistently and disciplined. If we invest for our excitement and

identify a stock, the chances of NOT achieving this goal will be very high. Second important thing is to not get distracted. That is, there will be a lot of noise around us. That too, particularly if we go to the Equity market, there will be a lot of voices saying, don’t

invest now, stop it today. They say, you can buy it as soon as it goes down. Whether someone else says it or not, when we look at our Portfolio, we might make wrong decisions in these distractions. So, if we are dancing to unnecessary info from outside, then our

Portfolio will reflect that only. Another interesting thing about compounding is that… if we invest a lot of Capital, our growth will be very high. Let’s take the same 10% example. If we invest ₹1 lakh and get 10% return, we will get ₹10,000

Profit. If we invest ₹10 lakhs, we will get ₹1 lakh Profit. If we invest ₹1 crore, we will get ₹10 lakhs Profit. It’s still the same 10% for the same 1 year. But if we want more returns, we need more Capital. That is

why if we raise the first ₹1 crore, the remaining growth will be earned from that ₹1 crore. If we look at the data, we saw that we will get ₹10,000 in the first year for ₹1 lakh . If we invest ₹1 crore instead of ₹1 lakh, we will get ₹10 lakhs Profit in the first

year. The next year, we will get ₹11 lakhs Profit. We are also looking at cumulative gains. The growth of our investment will also increase exponentially. Even if we look at the plan to grow ₹1 crore in 15 years, ₹1 crore today and ₹1 crore in 15 years might NOT have same

value. It might have lost some value. To know how much value was lost, we can use this Inflation adjusted calculator rule. If we assume ₹1 crore in 7% Inflation, and calculate it after 15 years, it will be equal to just ₹36 lakhs. That is, what we can do with

₹36 lakhs today, we can do with ₹1 crore that day. To find out how much to grow to match that value, we can use the future value calculator. If we assume ₹1 crore with 7% Inflation in 15 years, it will be equal to ₹2.75 crores. That is, if we add ₹2.75 crores after 15

years, what we can do with 1 crore today, we need ₹2.75 crore to do on that day. Even to add this ₹2.75 crores, we have to achieve the first ₹1 crore. If we achieve the first ₹1 crore, we can easily achieve this ₹2.75 crores. That’s what we saw. To use these tools, you can access

them free in the calculator section of www.Financeboosan.in. Check-out its link in the description. But the most important thing for all of this, is to identify the

investment that can give a return of more than 15%. Even if more than 190 Mutual Funds have given this return, it will be very confusing to choose from that. If you think that it would be better to choose only one safe investment a good option for that is the NIFTY Large Mid-Cap 250 Index. If you

want to know why this index is a safe and better option, check out this CashNews.co. I have shared its returns and all the details in that CashNews.co. If you think that this information is useful or new, Kindly like this CashNews.co : ) If you haven’t subscribed to our channel yet, do

subscribe and click on the bell icon… and select All to get notified of new CashNews.cos on this channel. — THANKS! Friends — ( Subtitled by Dwaraka )