No, this article is not aimed at the upper class kid whose parent opens a PPF account when he is 3 years old, and an ELSS when he is 5 years old.

This article is for a kid who is not so privileged. Let us say this kid can spare Rs. 500 a month from his 18th birthday (or even better Rs.40 a day like I say in my book) let us see what happens.

Well the kid starts a sip of Rs 500 a month from age 18 till the age of 22 years. Well that is not a great amount of money, but its a start is it not? Then at age 22 he qualifies as an Engineer and takes up a decent job and stays with his parents. Now the target for him changes a little – let us say he wants to be a ‘lakhpathi’ at age 25. Well it is difficult but not impossible. If he starts a sip of Rs 15k a month..increasing it by 10% every year, he should by a stretch reach Rs 10L at age 25. Not bad, yes he will require 17% return.

What about Rs. 40 a day for a slightly more prosperous kid? Let us raise the bar a little bit. Let us say this kid does Rs. 15000 a year for 5 years and then starts a sip of Rs. 15000 a month from age 23. Let us assume he increases it by 10% every year. Well at 12% a year return he becomes a CROREPATI at age 35 years. This is not bad at all. I know many 35 year olds from good families not being able to save from their incomes. Sure I know some 35 year old who are now doing their own business, but these kids are a different mindset.

So what can Rs. 40 per day do? What can Rs. 500 per day do? or worse I can invest only Rs. 40,000 one time – so what use it is are all STUPID QUESTIONS.

Will I get 18% pa or will I get 12% pa or…..are AGAIN stupid questions. It does not matter what percentage returns you get. Your ability to save (and invest that savings) is far more important. Imagine for a 35 year old with Rs. 1 cr in the mutual fund account – what a great pleasure it would be if the market gives a 60% return on his 36th birthday. He would have earned Rs. 60L in appreciation. If his friend had Rs. 10L in his mutual fund account, he would have got Rs. 6L. Huge difference, is it not?

Now lets get to from where you can get the amount of money to invest. Most of the kids I meet (I mean under 35 years of age) earn well, and can afford this kind of investments. However some of the good ideas are here…(again copy paste from seeing some of these kids)…

1. Take on chums – saves costs on rent, newspaper (if at all), maid, cook, electricity, etc.
2. Walk more and take public transport – huge huge difference
3. Have coffee at home or office.
4. If you must have coffee outside choose an Udipi over a Starbucks
5. I met one ENGINEER driving an Ola – he had bought a car bigger than he could afford!! So he was earning this extra to pay the extra fuel and emi. Father was a real rich man in a different city, and obviously father did not know about this.
6. One kid bought a 3 bhk, lived alone, took on one paying guest and put one room on airbnb.
7. If you MUST own a vehicle buy a well maintained second hand car – it depreciates less. Properly evaluate Uber, auto, Ola, taxi, own car before you decide.
8. Renting far more sensible than buying – at least till you have a couple of kids going to school. No hurry to buy, relax
9. The big 3 expenses – Housing, Transport and Food – have to be carefully committed to.
10. Keep accounts – of earning, investing, and spending. It could be the EASIEST way to find your Rs. 500 a day!!

All the best. Remember, it is to be, it is up to me.