Crorepati Formula for Gen Z! How to start your journey to make your first crore in 2025

Making your first crore is a milestone many young earners dream of achieving. It might seem daunting, but with systematic investing, disciplined financial planning, and patience, this goal can become a reality.

If you're fresh out of college and starting your first job, seeking the right guidance is crucial. Let 2025 be the year you embark on a rewarding wealth-building journey. It's never too late to start investing, but the key is to take that first step and begin your financial journey.

The journey to your first crore can start from as little as 8800 per month for the next 20 years or 40,000 per month for the next 10 years (*assuming a 13% annualised return), suggest experts.

ETMarkets spoke to two financial experts, Mayank Bhatnagar, Co-founder and COO of FinEdge, and Bhavik Thakkar, CEO of Abans Investment Manager Pvt Ltd, share their insights on how individuals, especially those below 25 years, can plan their investment journey without compromising on life's little luxuries.

The Importance of Starting Early

The earlier you start your investment journey, the greater your advantage due to the power of compounding. Mayank Bhatnagar emphasizes that starting with a rational expectation and systematic investing is key. "Even if you cannot save Rs. 40,000 per month to accumulate a crore in 10 years, starting small, like Rs. 8,800 per month, can help you reach the same goal in 20 years," he explains.

Bhavik Thakkar adds that wealth creation is not just about accumulating money but achieving a balanced financial life. He recommends beginning with adequate life and health insurance to protect against unforeseen events.

Once protection is in place, focus on goal-based savings and investments for both short-term and long-term objectives.

Balancing Lifestyle and Investments

Both experts agree that your investment journey should not come at the expense of your lifestyle. "If you squeeze your lifestyle to invest, any market volatility might tempt you to stop investing, defeating the purpose," says Bhatnagar. Instead, plan your cash flows to ensure both investing and living well are sustainable.

Thakkar echoes this sentiment, highlighting the importance of discipline and balance. "True wealth planning is about enjoying life’s experiences while systematically building a corpus for future goals," he says.

Asset Allocation for Young Investors

The ideal asset allocation varies based on individual risk tolerance and financial goals. However, for Gen Z, both experts suggest a more aggressive approach to investing in equities, given the advantage of time. Mutual funds emerge as a preferred choice due to their flexibility, diversification, and professional management.

Bhatnagar advises against speculative investments like cryptocurrency or derivatives for beginners, as these can lead to irrational decisions and wealth destruction. Instead, he recommends a scientific investing process tailored to individual needs.

Thakkar adds that while equity markets might offer moderate returns in 2025 compared to previous years, they remain a critical component of a wealth-building strategy. "Learn how equity markets behave during such times; patience is the key," he advises.

For fixed-income investments, long-duration funds can be explored, considering the potential for interest rate cuts in the coming year.

Making Your First Crore: The Numbers

Achieving a corpus of Rs. 1 crore requires consistent investing and a long-term perspective. According to Bhatnagar, investing Rs. 20,000 per month from the age of 25 could help accumulate Rs. 1 crore by the age of 40, assuming a 13% annualized return.

Thakkar’s calculation, based on a 12% post-tax return, suggests it would take approximately 15 years to reach the same goal.

Both experts emphasize the importance of increasing your investment amount as your income grows. This helps counter the impact of inflation and ensures your wealth-building journey keeps pace with your financial goals.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)