Introduction:
Building 1 crore in India is not just about being a karodpati. It's your ticket to true financial independence. Once you cross it, everything changes. But the sad reality is that less than 30 lakh people in India are actually karodpati out of a population of 140 crore Indians. That's just 0.2% of the population. But the good news is that by 2030 at least 1 crore karodpatis will be made in India. But the question is will you be one of them? Let's start with why 1 crore because after 1 crore your investment start generating more money than most people's salaries.
Think about it.
Once you have 1 crore rupees invested, you have created another you who is
passively generating 1 lakh rupees per month. What do
most people do? Most people exchange their time for money to pay for
liabilities like home loans and car loans and get stuck in this never-ending
loop. But once you have 1 crore of savings, the passive income that it
generates can help you pay off at least 60 to 70% of your EMIs. And that is the
beginning of your financial freedom journey. Now before I
actually teach you how to become a karodpati in less than 10 years, let
me first bust the biggest myth of all that keeps millions of educated Indians
poor. I hear this constantly. Sharon, if I just had a job shift from TCS to
Google and start making 50 lakhs per
annum, then I would
be rich overnight. Completely wrong. The problem isn't your salary. The problem
is the lifestyle inflation trap that millions of Indians get sucked into once
they move into a bigger city. I've seen software engineers making
upwards of 30 lakhs per
annum but still have
a savings rate much lesser than a government employee making 12 lakhs per annum. How is this possible? So, when you start earning
more in India, the society immediately upgrades you to a higher minimum
expected lifestyle. We see this all the time. Moving from a 20k per month rent
in Whitefield to 70k per month rent in Indiranagarr. Upgrading from a Honda Activa to a 1 crore BMW. Moving from cooking at
home to ordering constantly from Swiggy almost every single
day. Now before you know it, your increase in salary quickly vanishes into
higher lifestyle expenses.
Now don't get
me wrong, you definitely need a minimum salary to become a karodpati in the next 10 years. Our parents got half of the
advice right. Study hard, get good marks, get into a top university, get a high
CTC package and then life will be set. But the reality is life is not set even
after you get a 50 lakh package. Because unfortunately schools and colleges did not teach us what to do with that money once it hits your bank account.
So let us find out what is that minimum salary that you need to become a karodpati in the next 10 years. We will first assume a 30%
savings rate on your post tax income. Now I know what you must be thinking.
Most people are not able to do this because they take up too many loans very
early on in their life and living a hand-to-mouth existence. Do not be that
idiot else you will always be financially poor.
Second, let us
also assume that you can increase your
savings rate by
at least 10% every year. Now I know what you must be thinking. Sharon, it's not
possible to increase your salary by 10% every year. I get that. But I also know
that if you work really hard and if you're in the top 20% of the employees, it
is very easy to get promoted at least once every 3 years and get that 15 to 20%
hike and to also do a job shift once every 5 years and get a 30% hike. That way
on an average you can definitely generate a 10% salary hike every year. Now if
you're a slacker who wants everything to be handed to you on a silver
platter then I'm sorry you cannot be a karodpati in a competitive country like India. So, if I
assume a 30% savings rate and a 10% step up in savings every single year you
will need to earn at least 12 lakhs per annum after generating 12% post tax returns.
Now the best
part is you don't have to pay any income tax on that 12 lakhs per annum post budget 2025. But what about the taxes on the
1 crore that you just made? You don't have to pay any taxes until and unless
you sell that 1 cr. Remember, we did not just make that 1 crore
to spend it. We generated that 1 crore to be financially free. So, until and
unless you sell it, you don't have to pay any taxes. What do rich people do?
Billionaires like Elon Musk don't actually sell their shares when they have to
buy a yacht or a mansion. they actually take a loan against those shares at a
very low interest rate and that way they don't have to pay any taxes. You can
do that too by taking a loan against your mutual funds at 10 to 11% interest rate. That way whenever you have to make a big purchase,
you don't have to sell your stocks or mutual funds to actually make that big
purchase. But now comes the tough part.
How do you
actually generate those 12 to 15% post tax returns to actually become a karodpati in the next 10 years? Now if you look at the last
5 years, there have been dozens of mutual funds that have given upwards of 30%
CAGGR in the last 5 years. But assuming that for the future would be too
optimistic because that happened because of the
bull run that
we just saw post pandemic. But assuming a 15% post
tax returns is reasonable according to me if you are a passive investor who
doesn't want to do a lot of grunt work reading financial statements and annual
reports every single day. So, if you are a passive investor who wants to invest
and forget, this is what I would recommend. 60% of your money in the Indian
stock market, 10% of the money in the US market, 15% in gold, 10% in fixed
deposits and 5% in crypto. Which means if you are investing 30k per month SIP, around 18,000 rupees would go into Indian stocks and
Indian mutual funds. 3,000 rupees would go into US stocks and ETFs and some
tech companies. 4,500 rupees would go into gold mutual funds or ETFs or
sovereign gold bonds in the secondary market. 3,000 rupees would go into a
fixed deposit or bonds and 1,500 rupees would go into crypto. This is the ideal
portfolio mix for someone who is not an active investor and just wants to
invest and forget. So, if you follow this
blueprint religiously in a disciplined
manner, you
have a very high chance of becoming a karodpati in the next 10 years. But
what are those traps that could absolutely derail your plans from reaching that
1 crore?
Trap number
one, not having enough health insurance coverage. Most of you guys would only
be dependent on your company's corporate health insurance policy, which is
usually not more than a 5 to 10 lakh coverage. That is not even 50% of the
minimum required amount, especially if you're living in a big city. Imagine
getting a 20 lakh hospital bill forcing you to sell your mutual funds. Bye-bye
karodpati. Not just that, if you ever lose your job to AI,
that company health insurance policy becomes invalid and most of these policies
have very unfavorable clauses which forces you to pay an additional amount
even if you have the coverage. If you need free advice on your existing
policies and if you need to upgrade to a better policy, you can check out the
link below where we provide free advice on all kinds of health insurance and
life insurance requirements. We also help you get out of the bad
policies for completely free of cost.
Trap number
two, family pressure spending. This is probably one of the biggest wealth killers
for Indians. Most Indians are very comfortable spending 20 lakh on a wedding
that too on a loan and they're very comfortable taking a 1 and a2 crore home
loan as soon as they get married. If you do this your chances of becoming a karodpati before you turn 45 is almost next to impossible
unless you start earning at least 40 to 50 lakhs per annum.
Trap number
three increasing your monthly expenses by more than 10% every year. Learning
how to budget is an underrated skill among India's youth. The annual savings
rate of Indians has been on a declining trend over the last decade. Not because
we don't earn more money, but because the world has created more ways to spend
that money. Always remember guys, if you're making one lakh per month or 10
lakh per month, the world will always convince you that you absolutely need
that new iPhone 17 to be happy. So, in conclusion, building 1 crore in
the next 10 years isn't about luck or inheritance. You do not need to go to IIT
or even have rich parents. You just need to have a proven system and follow it
diligently with absolute discipline. Now the ball is in your court. Do you want
to be a dreamer or an achiever? Dreamers are people who just watch the video
and brag about their knowledge increasing. Achievers are people who actually
use that knowledge and put that into action immediately.
Conclusion:
Hope you liked this blog post and this will certainly help to create a plan to become karodpati in upcoming years. Let me know your thoughts in comments section.
Tags: Finmotive, #Finmotive, #Finmotive001, #FinancialGoals #Crorepati
#Wealth #1Crore #financialfreedom2025 #Money #Savings #Finance #Investing
#WealthBuilding #India #PersonalFinance #InvestSmart #Compounding #RichMindset
#FinanceWithSharan #1PercentClub
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