Simple steps for a 35 y.o to become rich by 50

Here’s the modified list, removing loans and focusing on non-interest-bearing debt, along with a sample calculation showing the power of saving 20% of income over 30 years with a 13% annual return.

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20 Effective & Easy Financial Guidelines for Salaried Professionals

Savings & Budgeting

1. Follow the 50-30-20 Rule – Allocate 50% to needs, 30% to wants, and 20% to savings and investments.
2. Pay Yourself First – Before spending, set aside at least 20% of your income for future financial security.
3. Automate Savings – Set up automatic transfers to savings and investment accounts to ensure consistency.
4. Build an Emergency Fund – Maintain at least 6 months’ worth of living expenses in a liquid account.
5. Track Expenses – Use a notebook or  or spreadsheets to monitor where your money goes.
6. Reduce Unnecessary Expenses – Avoid impulse spending and unused subscriptions to maximize savings.
7. Review Your Finances Regularly – Assess your financial status quarterly and adjust goals accordingly.

Investments & Wealth Growth

8. Follow the 100-Age Rule – Allocate (100 - your age)% of your portfolio to equities for long-term growth.
9. Start Investing Early – The earlier you start, the more you benefit from compounding.
10. Diversify Investments – Spread investments across stocks, bonds, mutual funds, and real estate.
11. Increase SIP Contributions Annually – Raise your mutual fund SIP amount by at least 10% each year.
12. Invest Consistently, Not by Market Timing – Regular investments beat market speculation.
13. Consider Inflation in Planning – Ensure your investments grow faster than inflation.

Debt & Responsible Spending

14. Avoid Unnecessary Debt – Borrow only for absolute necessities like education or emergencies.
15. Use Interest-Free Payment Plans Wisely – If available, use zero-interest installment plans but avoid overspending.
16. Control Credit Card Usage – Pay the full bill every month to avoid penalties and maintain a good credit score.
17. Live Below Your Means – Spend less than you earn to achieve financial security faster.

Retirement & Future Planning

18. Follow the 25X Rule for Retirement – Aim to accumulate at least 25 times your annual expenses for financial independence.
19. Invest in Health & Term Insurance – Protect yourself and your family with adequate coverage.
20. Create Passive Income Streams – Explore side businesses, rental income, or dividends for additional financial security.

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Sample Calculation: Saving 20% of Income & Earning 13% Annually for 30 Years

Assumptions:

• Monthly income: ₹1,00,000
• Savings rate: 20% → ₹20,000 per month
• Annual return: 13%
• Time period: 30 years

Using the formula for Future Value of a SIP:

$$FV = P \times \frac{(1 + r)^n - 1}{r} \times (1 + r)$$

Where:

• $P = 20,000$ (monthly savings)
• $r = 13\% / 12 = 0.01083$ (monthly return)
• $n = 30 \times 12 = 360$ (months)

Let's calculate:

After 30 years, by saving ₹20,000 per month and earning a 13% annual return, your total savings would grow to approximately ₹8.84 crore.

This demonstrates the immense power of disciplined saving and long-term investing.