PPF Investment: The new financial year has begun, so new financial planning is also needed. But, the tool is the same old and favourite Public Provident Fund. Whether you take any other guarantee or not, with PPF you are guaranteed to become a crorepati.
PPF Investment: No one wants to grow old before time. But, if it is about early retirement, then probably most people would like to retire peacefully and have a lot of money for the rest of their life. The new financial year has begun, so new financial planning is also needed. But, the tool is the same old and favourite Public Provident Fund (PPF). Whether you take any other guarantee or not, with PPF you are guaranteed to become a crorepati. This is such a scheme, which with safe investment will make you a crorepati before retirement age and then there will be money to spend your old age peacefully.
PPF Investment: Follow this Trick
The advantage of PPF Investment is that the scheme can make you a Crorepati before retirement age (60 years). But, for this you have to follow a trick. If you understand this method, then you can definitely retire 5 years before retirement, that is, retire as a Crorepati at the age of 55. After this, you can spend the time left without tension.
It is important to be a horse for the long race
Whether it is a field of sports or investment, the one who lasts long is the horse for the long race. The same has to be followed in PPF as well. Because, you will get good returns from long term investment and that will help you become a Crorepati. You can invest up to Rs 1.50 lakh annually in PPF. That means Rs 12,500 every month. Now we have to understand how much investment we have to make to become a millionaire and by when…
PPF Investment: Benefit of 7.1% interest
PPF is a scheme of the central government. It means a completely safe investment. The Finance Ministry decides its interest. The interest is calculated every quarter. Currently, interest is being received at the rate of 7.1%. Investment in this is for 15 years. If we look at the calculation, the total value of an 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.
PPF Investment: Now understand the trick
Case number-1
1. Suppose you are starting investing in PPF at the age of 30.
2. You will have to deposit Rs 12500 every month. After 15 years, the total deposit in PPF will be Rs 40,68,209.
3. You don’t have to withdraw money, the extension strategy will come in handy here. Extend PPF twice in a period of 5 years each.
4. The benefit of extending it for 5 years after 15 years will be that your total amount will increase to Rs 66,58,288 after 20 years.
5. After the maturity of 20 years, extend the investment for another 5 years. After 25 years the amount will be Rs 1,03,08,015. That means you will become a crorepati.
Crorepati at the age of 55
So from the above calculation you can see for yourself that you became a crorepati in 25 years. At the age of 30, you invested Rs 12500 every month in PPF and continued for 25 years. At the age of 55, you will have a corpus of more than 1 crore. The maturity of a PPF account is 15 years.
Case number-2
If you cannot invest Rs 12,500 at once every 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. After 20 years, the total value will be Rs 53,26,631.
4. Extend it again for 5 years, after 25 years the total value will be Rs 82,46,412.
5. Extend it again for 5 years, after 30 years the total value will be Rs 1,23,60,728.
6. Check, you will become a millionaire this time also at the age of 55.
Case number 3
If even Rs 10,000 is too much, then invest only Rs 7500 per month. Here also 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 you extend it for 5 years, i.e. after 20 years, this amount will be Rs 39,94,973.
3. If you extend it for another 5 years, i.e. after 25 years, this amount will be Rs 61,84,809.
4. If you extend it for another 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 will be Rs 1,36,18,714 after 35 years.
6. Now if we calculate, we will see that here also at the age of 55, you will have more than 1 crore. But, the advantage of starting early is that the corpus will be quite large here.
But how did this happen?
Remember, this is the trick to become a crorepati, long term strategy. In PPF investment, you get the benefit of interest on interest i.e. compounding interest. Meaning, the longer you stay, the more you benefit and the amount also gets smaller. This is the trick to become a crorepati.
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