70:15:15 Investment Strategy: Can you build Rs 2.41 cr corpus by 55 years of age with starting salary of Rs 25,000? Know how

It's important to manage expenses within your income level. If you're struggling to balance your expenses and savings, consider the 70:15:15 Investment Strategy, especially if you're 25 and aiming to accumulate over Rs 2 crore for retirement, even after covering your expenses.

Let’s assume you earn Rs 25,000 per month. It's crucial to save a portion of this income, and the 70:15:15 rule can guide you in doing so.

According to this strategy, allocate your salary as follows: use 70 per cent for essential day-to-day expenses, set aside 15 per cent to build an emergency fund, and invest the remaining 15 per cent in a Systematic Investment Plan (SIP) each month.

This approach allows you to manage your living costs while preparing for unexpected expenses and growing your wealth over time.

If you earn Rs 25,000 per month, here’s how the allocation breaks down:
- 70% for Living Expenses: Rs 17,500 for essential expenses.
- 15% for Emergency Fund: Rs 3,750 each month to build an emergency fund, ensuring you don’t have to dip into your investments during tough times.
- 15% for SIP Investments: The remaining Rs 3,750 will be invested in an SIP each month.

Assuming your salary increases by 5 per cent each year, using the step-up SIP formula, you could build a corpus of Rs 2.41 crore at an annualized return of 13  per cent.

If you start investing Rs 3,750 every month for 30 years, increasing your SIP contribution by 5 per cent annually and assuming a 13 per cent annualised return, you will contribute a total of Rs 29,89,748.

With a 13 per cent return, your long-term capital gain would be approximately Rs 2,11,80,645.

After 30 years, your investment could grow to approximately Rs 2,41,70,394.

SIPs offer substantial growth, outperforming many other investment schemes. Additionally, the rupee cost averaging feature ensures that expenses remain stable, even during market fluctuations.

SIPs offer flexible investment options, allowing you to choose the investment amount and period that suits your needs, whether monthly, quarterly, or semi-annually.

As per your financial requirements, you have the freedom to pause, withdraw, or increase SIP investments.