Is it possible to reach 1 cr by 30 ? I have financial anxiety

[khristine]

Hello All,

I am 28 years old and I have been working as a software engineer since past 4 years. I have a very good salary and when I see online that people with similar income as mine have way more savings, it gives me financial anxiety.

I am sharing a rough look at my income progress, major expenses, and current net worth breakdown below.

I humbly request you to go through it and suggest what I am doing wrong.

I want to reach 1 crore in 2 or 3 years, is it possible? I will heavily invest in MFs, etc going forward.

CTC:
Jan 2020 to Oct 2020: 15K Per month
Nov 2020 to Sep 2021: 10 LPA ( ~ 65K inhand pm)
Sep 2021 to Dec 2021: 20 LPA (~ 1.4L pm inhand)
Jan 2022 to Dec 2022: 21.6 LPA ( ~ 1.4L pm inhand)
Jan 2023 to Dec 2023: 27 LPA (~ 1.7 L pm inhand)
Jan 2024 to Dec 2024: Yet to find out but probably +20%

Major Incurred expenses:

1. 17 Lakh car (4 lakh given by father) (Taken 10 lakh loan)
2. TV and Entertainment unit: 2 Lakh
3. Phone and watch: 1.7 Lakh
4. Family expenses: 2.3 Lakh

Major recurring expenses since july 2022
(WFH ended)

1. Rent 15500, now 17K since diwali
2. Maid+cook 3000 per month
3. Electricity: 1-1.5 K per month
4. Car EMI: 20,638 PM since April 2023
5. Car fuel: 15K PM since April 2023, before this I used uber which costed way less

Rest, a lot of miscellaneous on food ordering, etc

Currently portfolio:

1. Mutual Funds: 13,11,392
2. Equity: 1,35,982
3. Demat: 1,51,716
4. Open future positions: 3,89,544
5. Bank: 5,69,499
6. PF: 6,12,891

Total current : 31,71,024

(I also have a car, do I include it in net worth?)

I also have 16 lakhs in RSUs as well, 25% vesting each year. I would vest 4 lakhs of it end of this month (pre tax)

 

[haston]

@khristine No, car is not included in net worth calculations.

Assuming you will make 2 lac per month in hand this year, and given your expenses, you should aim to save 1 lac a month.

No one can guarantee whether you'd reach 1cr by 30 or not (most likely no) but in the long run it's not going to matter. Just incorporate discipline in spending & savings. For example, the car is probably more expensive than you should have bought. But now that you have, make sure to use it for 10+ years.

 

[khristine]

@haston Besides that, how do you think i have done?

 

[haston]

@khristine Given your age it's fine. My advice would be dont get obsessed about seeing other people's net worth etc. that will cause you unnecessary anxiety. As long as you are hitting your goals and saving a good amount, that's all that matters.

You never know when you get unexpected earnings or growth opportunities. My NW was 10 lacs at 27 and it's 2 crore at 32 (because I got the opportunity to move abroad).

 

[khristine]

@haston But doesn’t the car have a financial value? Even though deprecated

 

[haston]

@khristine There is no standard rule but generally only 'income generating' assets are included in net worth. I personally wouldn't include residential property as well.

 

[tfsm]

@khristine I think it's fair to include the current market value of the car. This would keep decreasing over time which is expected. Essentially it's the money you can make if you were to sell the car that point in time.

 

[haston]

@tfsm In that case the outstanding loan should be subtracted from it as well.

 

[homersimpson]

@khristine Mere paas ek scheme hai

 

[josephhayes]

@homersimpson 25 din me paisa double....??

 

[homersimpson]

@josephhayes Jor jor se bol ke logon ko scheme bata de

 

[khristine]

@homersimpson Batao

 

[aureliasoleil]

@khristine Hello OP hope you reach your target , i think i am a younger verssion of you in sane delima. I’ll be contributing for a family car soon and keeping other daily life expenses to be same i want to reach the same goal , currently i am 23 with 1.25 in hand .

Can you tell me how should i invest ( mfs since you mentioned heavily)

 

[khristine]

@aureliasoleil Start an sip in nifty 50 index fund (i do it with the tata one). Start one sip in Parag parikh flexi cap.

Start sips of only as much as you can forget, it would be like you don’t have this money. You will see it go negative, positive, everything. But with time, and discipline, it will grow a lot.

With that said, my first SIPs were 6K per month. You have much higher income to start with, you can decide according to your appetite. Best of luck.

You are young, don’t give up the fun in life.

 

[digitalgoth]

@khristine While I agree with most part of this, forgetting is not the right way. You need to review your mutual funds performance once a year, compare with other funds and the market. If performance is sub par for couple of years you need to move to better performing ones. MF is dependent on the fund manager, forgetting the sip is same as throwing away your hard earned money.

 

[aureliasoleil]

@khristine Sure i have started with the same for 10k looking for other funds

 

[khristine]

@aureliasoleil Start with index funds, just observe for some time.

 

[aureliasoleil]

@khristine Sure I’ll

 

[bob_from_it]

@khristine You need to stop thinking too much about money and enjoy life dude, you are young only once, money comes and goes

 

[khristine]

@bob_from_it In my case it just seems to be going and going