A Realistic Path to Earning 1-2 Lakh Per Month with Investments
Many wonder if earning 1-2 lakh per month with an initial investment of 10,000-20,000 Rs is feasible. The answer, while challenging, is possible through strategic investment and understanding the power of compounding. However, it is important to approach this goal with realistic expectations and a well-thought-out plan.
Systematic Investment Plan (SIP) in Mutual Funds
To achieve the desired income, the key lies in a Systematic Investment Plan (SIP) in diversified mutual funds. This approach involves a long-term investment horizon, which allows the power of compounding to work in your favor. It is important to realize that mutual funds involve market risks, and therefore, it is advisable for risk-averse investors to also consider the Public Provident Fund (PPF) scheme run by the post offices and banks.
A Diversified Mutual Fund Example
Assuming an annualized return of 8%, a monthly SIP of 20,000 Rs for 25 years would result in approximately a saving of 19,020,528 Rs. This amount can then be invested in safe investments such as bank fixed deposits. Assuming a return of 7% on this investment, an investor can earn around 1.10 lakh per month going forward. This demonstrates the potential of such a long-term strategy.
Insights from a Milkman's Business
To further illustrate the concept of exploiting a small investment for significant returns, let's consider a real-life example. A milkman, for instance, could potentially earn 90,000 Rs per month with an initial investment of 13,500 Rs. He sold about 300 liters of milk each day with a margin of 5 Rs per liter. Upon further inquiry, he admitted to mixing 10% water with milk. Consequently, his business was highly profitable, even though it was technically misleading to his customers.
Risk Considerations and Ethical Business Practices
While the milkman's business model was impressive, it raises questions about honesty and ethical practices. The same principle applies to attempting to earn 1-2 lakh per month with an initial investment of 10,000-20,000 Rs. It is important to recognize that such opportunities are often highly sought after, and the moment they become known, the return becomes ordinary as money flows into the sector. Additionally, if a person discovers such an opportunity, they are unlikely to share it for free. The information would be invaluable and exclusive, making it a lucrative business for its discoverer.
Even if you are aware of speculative methods that could lead to such numbers, they come with high risks. These are not considered traditional “income” strategies. It is essential to have a practical and realistic approach to investing, focusing on sustainable and legal methods that can support long-term financial success.
Ultimately, the power of compounding, a carefully planned Systematic Investment Plan (SIP), and diversification are key components to achieving a comfortable monthly income. It is also crucial to remain mindful of market risks and explore options such as the PPF scheme for additional safety.