How to become crorepati: PPF is a central government scheme. Meaning completely safe investment. The Finance Ministry decides its interest. Interest is calculated every quarter. At present interest is being given at the rate of 7.1 percent.
If you also want to become a millionaire then now your time is over. To become a millionaire, start investing from today itself. Investment has to be made every month. Have to do it with small amount only, not much. But, you have to be regular. The advantage of investing in Public Provident Fund is that with the scheme you can become a millionaire even before retirement age. If you keep investing in the manner mentioned here, you will become a millionaire at the age of 55. Just for this one trick will have to be used.
Long term i.e. keep investing money for a long time
A long racing horse is one which lasts for a long time, be it in the field of sports or investment. You have to become that long race horse of investing in PPF. Because, long term investment will give you good returns and will help you in becoming a millionaire. You can invest up to Rs 1.50 lakh annually in PPF. Meaning Rs 12,500 every month. Now it is important to understand how much investment will have to be made to become a millionaire and for how long.
PPF: 7.1 percent interest benefit
First of all, know that PPF is a central government scheme. Meaning completely safe investment. The Finance Ministry decides its interest. Interest is calculated every quarter. At present interest is being given at the rate of 7.1 percent. Investment in this is for 15 years. If we look at the calculation, the total value of investment of Rs 12500 per month will be Rs 40,68,209 after 15 years. The investment amount in this will be Rs 22.5 lakh and the interest will be Rs 18,18,209.
Now understand the trick to become a millionaire
Case number-1
1. Suppose you start investing in PPF from the age of 30.
2. You will have to deposit Rs 12500 every month. The total deposit in PPF after 15 years will be Rs 40,68,209.
3. Do not have to withdraw money, extension strategy will be useful here. Extend PPF twice in a period of 5 years.
4. After 15 years, the benefit of extending it for 5 years will be that your total amount will increase to Rs 66,58,288 after 20 years.
5. After maturity of 20 years, increase the investment for another 5 years. After 25 years the amount will be Rs 1,03,08,015. Meaning you will become a millionaire.
Became a millionaire at the age of 55
So from the above calculation you can see for yourself that you became a millionaire in 25 years. At the age of 30, invested Rs 12500 every month in PPF and remained there for 25 years. At the age of 55 you will have a corpus of more than Rs 1 crore. The maturity of PPF account is 15 years.
Case number-2
If you cannot invest Rs 12500 in one month then reduce it a little. But if you want to become a millionaire at the age of 55, then you will have to start a little earlier.
1. Start investing Rs 10,000 every month in PPF at the age of 25.
2. At the rate of 7.1 percent, after 15 years you will have a total of Rs 32,54,567.
3. Now give it an extension of 5-5-5 years. The total value after 20 years will be Rs 53,26,631.
4. Extend it again for 5 years, the total value after 25 years will be Rs 82,46,412.
5. Extend it again for 5 years, the total value after 30 years will be Rs 1,23,60,728.
6. Check, at the age of 55 you might have become a millionaire this time too.
Case number 3
Now even Rs 10,000 is becoming more, so invest only Rs 7500 per month. Here too you will become a millionaire by the age of 55, but you will have to start investing at the age of 20.
1. The total value of Rs 7500 in PPF at 7.1 percent interest for 15 years will be Rs 24,40,926.
2. If extended further by 5 years, i.e. after 20 years, this amount will be Rs 39,94,973.
3. If extended for 5 more years i.e. after 25 years, this amount will be Rs 61,84,809.
4. If extended further by 5 years, after 30 years this amount will increase to Rs 92,70,546.
5. If you continue investing for 5 more years, the amount after 35 years will be Rs 1,36,18,714.
6. Now if you do the calculation, you will see that here also at the age of 55 you will have more than Rs 1 crore. But, the advantage of starting early is that the corpus here will be much bigger.
But how did this happen?
Remember this is the trick to becoming a millionaire. Long term strategy. In PPF you get the benefit of interest on interest i.e. compounding interest. Meaning, the longer you stay, the more profit you get and the amount also becomes smaller. This is the only trick to become a millionaire. So start investing and build your bank balance.
