It’s not just high investment returns that make you rich…

Most of us ignore this fact

The magic number to get rich is not just your returns but also your savings rate. In other words, it depends on how much money you invest.

Example of a low savings rate

A invests Rs 5,000/month in a 15%-growing investment. He’d have Rs 1.38 cr in 25 years. B invests Rs 25,000/month in just a 9%-growing investment. He’d have Rs 2.66 cr in 25 years

Another example

If you save just 5% of your income each month, you’d have to work till at least your 70s to have enough for retirement. To retire rich, you need 25 times your annual expenses.

How much you should save to retire rich

Age 25: Save min. 20% of income Age 30: Save min. 25% of income Age 35: Save 25-30% of income Age 40: Save around 40% Age 45: Save around 50%

The solution to save more

Utilise step-up SIP. Here’s why: If you increase your monthly SIP of Rs 10,000 by 5% each year, you’ll have Rs 8.6 crore in 30 years!

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