How to Become a Millionaire by the age of 30
Having bagged your first job after college is a great feeling. After all, you are now financially independent and need not seek the permission of your family before incurring any expenditure. After the completion of the initial honeymoon period, reality starts setting in and you start planning for your future. Filled with enthusiasm and motivated by the famous saying “The first million is the toughest”, you will most probably have your eyes set on becoming a millionaire by the age of 30.
Becoming a millionaire can be a tough goal during any stage of your work life, let alone when you have just started and are trying to find your feet. Moreover, the rising cost of living and steadily increasing inflation act as impediments in fulfilment of your goal to become a millionaire as soon as possible. There might be times when you would start contemplating if it is at all possible to realize this goal. But there is no need to cast aspersions over your aspirations.
No financial goal is impossible if you have a proper plan in place.
Your journey to be a millionaire by the age of 30 is going to be an eventful one. There will be many ups and downs that you will face, but this goal can be well within your reach. With a disciplined and focused approach, you can overcome all hardships and emerge a millionaire as young as possible. Here are some tips that will prove handy in helping you realise this goal of yours: –
- Create multiple sources of income
One of the most important steps in realising your dream to be a millionaire is to create multiple income streams. No matter how comfortable you are in your current job, the journey to becoming a millionaire requires you to have a sizeable investment corpus. This is only possible by earning money from multiple sources. Such sources may include investment in ULIP, mutual funds, stocks, fixed deposits or a side business. For instance, by investing in saving investment plans, offered by companies like Aviva, you can not only enjoy the protection of insurance cover but can earn a steady income on your investment. There are multiple saving plans for you to choose from, as per your requirements.
- Follow a budget
It is paramount that you prepare a monthly budget for your finances. Herein you should record all your receipts. As a rule of thumb, set aside 20 per cent for investment in a suitable saving investment plan or any other investment as per your risk appetite. You need to manage your expenses from the remaining 80 per cent of the money, and even that should be spent judiciously. Remember that the financial security you will enjoy after becoming a millionaire is entirely worth the effort.
- Start investing
When you have started saving, ensure that the money must not sit idle in your bank account. You must invest it in high yield investments that offer better returns as compared to the rate of inflation and at the same time, ensure the safety of the money invested. This goal can be achieved by investing in suitable saving plans wherein you not only generate inflation-beating returns from ULIP investment but also enjoy protection with a comprehensive life insurance cover. The key here is the striking perfect balance between risk and returns.
- Diversify your investments
Once you have started investing, do not stop. You must understand that the market goes through various cycles, and you must keep a keen eye on these developments. This will allow you to keep a close eye on your investments and take corrective actions as and when necessary. You must abide by the golden rule “Never put all your eggs in one basket,” and make sure that you mitigate your risk by developing a diversified investment portfolio over time with the help of various saving investment plans. Also, remember that investments take time to grow, so do not be erratic.
- Spend smartly
One crucial task that you must undertake to maximize your savings is to get rid of unnecessary expenses. You need to ascertain certain expenses that can be avoided or adjusted. Splurging is not an option, and you must stay away from that. You can also save significant amounts of money by becoming a smart shopper. For instance, shop during sales or instead of international locations holiday at local destinations. These small efforts will go a long way in helping you realise your dream of being a millionaire.
- Get rid of expensive debt
Credit card debt is one of the biggest drains on your finances. Not only does it lead you to spend money unnecessarily but also levies a heavy interest burden as high as 42 per cent or more per annum. You must, therefore, get rid of all the credit card debt that you have accumulated as soon as possible. Moreover, you must consolidate all your loans and credit cards debt into a single loan, which will not only make the repayments easier for you but also reduce the total interest rate, instances of late payments and penalties.
- Plan your taxes
Tax planning is an integral part of any well-rounded financial plan. As an honest citizen, you must pay tax on your income, but it does not mean that you can not reduce your tax liability. There are various investment schemes under Sec 80C of the Income Tax Act, 1961 wherein you can claim a deduction of up to Rs. 2 Lakhs on your income. Savings Plans offer you the opportunity to claim an income tax deduction against your investments. By reducing your income tax liability, you can generate spare funds for the fulfilment of your financial goals.
The goal of becoming a millionaire by the age of 30 is neither impossible nor improbable. With proper planning, persistence and focus, you can easily realise this goal. The key to becoming a millionaire is to generate wealth through your investments, and that can be fast-tracked by investing in carefully selected saving investment plans, including ULIP and mutual funds, available in the market.