Greeting To Our Readers!
Retiring Rich is a big word, every individual has this goal in their financial list and to achieve this they try their best ways, plan their finances, expenses, and investments in an ideal way, to accomplish this very goal.
Well, do you actually know what is Retiring Rich?
For many individuals, retiring rich is equal to building a corpus to last through a lifetime and more. However, retiring rich has a modified definition: building a corpus big enough that would last a lifetime and give one a better lifestyle than before.
Key Takeaways-
- Retiring rich is not difficult only you need to start investing in the right place for the right time.
- Saving is good but this is not the ideal way to plan for your retirement.
- Invest what you save monthly in a financial instrument that lets your investment grow with its full potential.
- Start investing a part of your monthly savings, regularly in Equity mutual fund through SIP, for the long term.
- Diversify your Equity mutual fund portfolio, with four mutual fund schemes particularly in the large-cap and multi-cap segments, for retiring rich.
Achieving this goal is not difficult, only an investor needs to understand what strategies he must apply to their investment plan. He needs to understand the right investment instrument and the right investment period to help them retire rich.
Here’s a quick one-minute guide as to how one can retire rich.
Saving More Is Essential….
Saving is good, but for retiring rich, saving more is essential!
Ideally, it is advised that save 15% of your monthly salary for retirement, but for retiring rich, it is advised to save 20% from your monthly paycheque towards retirement. Saving in this way ensures that the individual has surplus money to go around during retirement.
Make Saving Easy…
People say “kar lenge saving, bahut assan hai” but it is not that easy as it is said. Saving money also requires planning and strategy.
The best strategy to save money is to set an auto-debit from one’s salary account into a separate savings account. Simply keep two separate bank accounts, one for your expenses (salary account) and one for your investments (a funding account).
When you receive your salary, transfer your investment part to your funding account, which is meant only for investment. This strategy helps classifying money easily. This also restricts individuals from taking money out of funding account for some unessential want. Well, this would not happen if all the money was lying in the salary account.
Start A SIP…
Well, you have kept your investment part separate in the investment-focused bank account, it is time to start investing this part regularly in Equity mutual funds through SIP, for the long term. Investing in Equity mutual funds via SIP for the long term will help you create a large corpus that will let you retire rich.
Investing through SIP for long-term inculcates, helps the investors in three ways:
- Helps to build financial discipline
- Assists to average the unit purchase cost and collect more mutual fund units with inflation-beating returns.
- Helps leverage the power of compounding over the long term.
Diversify With Right Number of Equity Mutual Funds…
Ideally one needs to invest in four schemes particularly in the large-cap and multi-cap segments, for retiring rich!
Large-cap funds invest in big companies with large market capitalization; thus, it is a bit low riskier than its counterparts and offers around 10-12% returns. On the other hand, Multi-cap schemes have a bit higher risk and exposure to market ups and downs but can also be rewarding.
These funds have the potential to earn returns that may be higher than large-cap funds. People often go over-diversifying their portfolios, which ultimately forces them to stop investments in contingencies because of easy accessibility.
Let Us Sum Up….
So basically, while constructing your retirement portfolio, keep in mind not to over-diversify it Instead, diversify it with the right number of large-cap schemes and multi-cap schemes.
To construct a portfolio for your short and mid-term goals, via debt funds and hybrid funds. This will ensure that your retirement corpus is not disturbed for short-term requirements, till your retirement.
As of now, you know how you have to structure your Retire Rich Plan, so don’t wait, work on it and start your SIP today in Equity Mutual Funds!
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For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).