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If you want to make money from money, then first of all, start investing. Whether the salary is big or small, if you invest some part of it, then you can prepare a big amount. But how much money from the salary should be invested and where, this is the big question because it depends on this, how much fund you will be able to accumulate in how much time. Here is the magical formula that can make you a millionaire even with a meager salary of ₹ 20,000. This formula can prepare for you a retirement fund ranging from an emergency fund to 1 crore. So what are you waiting for? As soon as the salary comes into the account on 1st June, first of all, apply this formula.

The 70:15:15 formula will do wonders.
If you get a salary of Rs 20,000, then you can also easily fulfill your dream of becoming a millionaire. But for this, you will have to adopt the 70:15:15 formula of savings and investment. This means that you should keep 70% of your income for your needs, create an emergency fund with 15% of the amount, and invest the remaining 15%.

Understand with an example.
If you earn a salary of Rs 20,000 every month, then 70% of Rs 20,000 is 14 thousand, which means you will have to manage all your expenses with Rs 14,000. You have to keep 15-15%, i.e., Rs 3000-3000 for an emergency fund and investment. Even if you earn more than 20,000, apply this formula and manage your expenses and investments, this way you can raise a good amount for yourself and can also prepare a good fund for emergencies.

Where to invest to become a millionaire
Now the question is, where to invest to become a millionaire? So the answer is that you should invest your savings in mutual funds through SIP. SIP has the power to make even small savers a millionaire. The average return on mutual funds is considered to be 12 percent. Also, it gives the benefit of compounding. In such a situation, your money is converted into wealth quickly.

How to become a millionaire, understand the calculation.
If you invest 15 percent of 20,000, i.e., 3,000 rupees every month through SIP for 31 consecutive years, then in 31 years, you will invest a total of 11,16,000 rupees. But at the rate of 12 percent on this, you will get 92,74,3691 rupees only from interest. In this way, in 31 years you will be the owner of 1,03,90,369 rupees. If you get a return of 13, 14, or 15 percent, then with this investment, you will become a millionaire in even fewer years. If you start this investment at the age of 29, you will become a millionaire at 60.

Keep this in mind

Mutual fund schemes are market-linked, so returns cannot be guaranteed. The average return of SIP is considered to be around 12 percent. Therefore, the calculation here has been done based on a 12 percent return. It can be more or less depending on the market conditions.

Disclaimer: This content has been sourced and edited from Zee Business. 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.