Surprising but Simple Way This Man Doubled his Monthly Income by the Age of 50


By Tahira Zahoor

According to the report published by TOI, 47 percent of the Indian population do not save for their retirement. The same report says 44 percent of people who started saving for retirement have either stopped in between or faced financial crisis and difficulties to save continuously. One simple reason behind this is lack of knowledge about investment.

Do you think only government employees can avail pension after retirement and not those who work in private firms? Do you think building a corpus of such amount which can provide monthly income similar to your salary or even more, after your retirement is impossible? If so, then you must read this article to know how an individual doubled his income by the age of 50 with proper investments starting from the beginning of his career.

Using Monthly Income Plan/Pension Plan to Double the Income

At the age of 24, Mr Ravi Sharma started his first job earning a yearly package of Rs 4 lakhs. His net income after deducting PPF and gratuity came around Rs 30,000 per month. Being a responsible individual, he invested his money in a monthly income plan, i.e., a pension plan to save for the future and secure his family. He took this wise decision with the view to build a corpus which could earn him income equal to his salary after 25 years. So, he started with an investment of Rs 1,44,000 in the first year (12,000 per month) which was 40 percent of his annual income.

Moreover, his increment every year was around 7.5 percent, and the monthly income plan paid him an interest rate of 8 percent per annum. Since his income showed growth at 7.5 percent; his investment also grew at the same percentage which further increased his retirement corpus. After 25 years when he was 49, he had already built a corpus of Rs 2,16,03,904, i.e., a hefty amount of more than Rs 2 crore, which when withdrawn monthly for the next ten years came to Rs 1,80,032. In these 25 years, his income also became Rs 2,03,278 per month as it increased at a rate of 7.5%.

Thus, Mr Ravi Sharma, with a starting salary of Rs 30,000, became a millionaire by the age of 50 by investing Rs 12,000 per month. If you think, you need a lump sum or huge amount to start investing; you are wrong as proved by this individual. The secret is to start early, even though with a smaller amount and then increase your investment according to your growing income, which will help you achieve the desired result.

Why Is Starting Early Always Better?

In earlier days people were employed by the age of 20-21 years, but now with higher education becoming a compulsion to get a good job, most individuals start working at the age of 24-25. However, the age for retirement is still the same which is around 60 years. On top of that, inflation is out of control as it is rising at an alarming rate and the cost of living is increasing day by day. So, to live a life that you desire, you must start investing early to reap the benefit of compound interest provided by your monthly income plan.

For instance, if you start at the age of 40 by investing Rs 1,20,000 per year for next 10 years at 8 percent interest rate, compounding annually, you can build a corpus of Rs 1,7,38,388 at the end of 10 years. But if you start at the age of 25, you have 15 extra years for your investment to grow and even if you start with half the amount, i.e., Rs 60,000 per year for next 25 years at the similar interest rate, you accumulate Rs 4,3,86,356. And if you invest the same amount, i.e. Rs 1,20,000 per year, then your investment can build a corpus of Rs 8,7,72,712 in 25 years.

So, start early with right investments like pension plans or best mutual fund for monthly income and align them to your financial goals. If you do so, it is not that difficult to double your income by the age of 50 years.

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