Investment Formula: There are many people in our country who earn lakhs of rupees every month, but they never realize when their money runs out. If you are among those who earn Rs 1 lakh per month, then this news is for you. There is a simple and best investment formula for those earning Rs 1 lakh per month. This formula is the 50-30-20 rule, which divides your salary into three parts to cover expenses and also strengthen savings for the future.

First, allocate 50 percent of your salary, i.e., Rs 50,000, to essential expenses. This includes house rent, groceries, vegetables, electricity and water bills, mobile and internet, school fees, and other daily essentials. This portion should be spent without any restrictions, as these are necessities for survival.

How to invest?
Then, spend 30 percent of your salary, i.e., Rs 30,000, on personal expenses and entertainment. This includes spending money on outings, shopping, dining with friends, watching movies, and investing in new clothes or hobbies. This part brings you happiness and helps you enjoy life, but it's important to keep it under control so it doesn't overflow into unnecessary expenses.

Now, the most important part is to invest 20 percent of your salary, or 20,000 rupees per month. This is the minimum amount you should invest. If you can save more, even better, but be sure to invest at least 20,000 rupees. This money should not be invested in one place, but should be spread across various sources to reduce risk and generate good returns. For example, start a SIP in a mutual fund, invest in PPF, and if your company's share in EPF is also acceptable, be sure to get health insurance and term insurance to protect your family. And set aside some money for an emergency fund, such as 6-12 months' worth of expenses.

Benefit from compounding

This formula is beneficial because it is balanced. Even high spenders can follow this and gradually become wealthy. Investing offers the benefit of compounding, meaning that while you earn money, you can also accumulate a substantial corpus over time. The report states that investing, regardless of your salary, is essential to avoid difficulties in retirement, children's education, marriage, or any emergency. If you live in a city like Delhi, where expenses are high, you can still follow this formula with slight adjustments, but never reduce your investment by 20 percent.

Many people wonder how investing with ₹1 lakh is possible, but this formula shows that large goals can be achieved with small steps. This method may seem difficult at first, but once you get used to it, it becomes easier. If you start this at the age of 25-30, you can become a millionaire by retirement.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.