{"id":1329,"date":"2019-12-30T11:29:35","date_gmt":"2019-12-30T05:59:35","guid":{"rendered":"http:\/\/blog.budwisefunds.com\/?p=1329"},"modified":"2020-12-07T18:59:21","modified_gmt":"2020-12-07T18:59:21","slug":"how-much-income-should-i-earmark-for-investment-purpose","status":"publish","type":"post","link":"https:\/\/budwisefunds.com\/blog\/how-much-income-should-i-earmark-for-investment-purpose\/","title":{"rendered":"How much income should I earmark for investment purpose?"},"content":{"rendered":"\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Realizing the need for making an investment is equal to achieving half a milestone. People often consider investing as the last thing whereas it should be there priority.<\/span><\/p>\r\n<p><span style=\"font-size: 24px;\"><strong>Further Reading: <a href=\"https:\/\/whatismutualfund.in\/\" target=\"_blank\" rel=\"noopener noreferrer\">What is Mutual Fund<\/a><\/strong><\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">One should see it as investing for themselves and for their own future goals. A casual attitude towards investment is like pushing your luck. Start making investments in the initial years of your job can be of much help.<\/span><\/p>\r\n<p><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script> <ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-6495755798120621\" data-ad-slot=\"6499025866\"><\/ins> <script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" width=\"953\" height=\"458\" class=\"wp-image-1344\" src=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/3025.png\" alt=\"\" srcset=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/3025.png 953w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/3025-300x144.png 300w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/3025-768x369.png 768w\" sizes=\"(max-width: 953px) 100vw, 953px\" \/><\/figure>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">An individual should apportion his\/her income based on Rule 50\/20\/30. According to this rule, an individual should utilize 50% of his\/her income for necessary expenses, 20% of the income should be utilized for saving purposes and the rest 30% can be used for discretionary expenses or spending. <\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">An individual should not blindly follow this rule. As it will be always better if you allocate more portion of your income towards savings.<\/span><\/p>\r\n\r\n\r\n\r\n<h2><span style=\"font-size: 20px; color: #000000;\"><strong>Difference between Discretionary and Non-Discretionary Expenses or Investment<\/strong><\/span><\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Discretionary expenses are those expenses that are contingent upon your lifestyle or your wants. These are those expenses without which an individual can get by. On the other hand, non-discretionary expenses are the mandatory expenses that an individual has to make.<\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\"> These expenses are better defined as needs rather than wants. A person can control his\/her discretionary expenses but it is not possible to control one\u2019s non-discretionary expenses.<\/span><\/p>\r\n<h2 class=\"entry-title\">Also Read:<a href=\"https:\/\/budwisefunds.com\/blog\/save-money-secure-your-future-what-will-be-the-ideal-amount-i-should-save-every-month\/\" rel=\"bookmark\"> Save Money, Secure Your Future \u2013 What will be the ideal amount I should save every month?<\/a><\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Often young earners spend money extravagantly. They do not care about their future and focus only on their present. Though this might not be true for everyone but for the majority of them.<\/span><\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" width=\"906\" height=\"374\" class=\"wp-image-1332\" src=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/457.png\" alt=\"\" srcset=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/457.png 906w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/457-300x124.png 300w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/12\/457-768x317.png 768w\" sizes=\"(max-width: 906px) 100vw, 906px\" \/><\/figure>\r\n\r\n\r\n\r\n<h2><span style=\"font-size: 20px; color: #000000;\"><strong>Some points to be kept in mind While Investment\u2026<\/strong><\/span><\/h2>\r\n<p><span style=\"font-size: 20px; color: #000000;\"><strong>1.) Earlier the better<\/strong><\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">The earlier you invest, the better it is. The benefit of investing early is that your investments will be compounded for more number of years. For example, a sum of \u20b9 1,00,000 invested today will grow to 3.1 lakhs in 10 years if the investment earns 12% p.a. <\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">The same invested amount can grow to 9.6 lakhs and 29.9 lakhs in 20 years and 30 years respectively due to the power of compounding.<\/span><\/p>\r\n<p><span style=\"font-size: 20px; color: #000000;\"><strong>2.) It\u2019s never too late<\/strong><\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">Though it is always better to invest upfront, that doesn\u2019t mean you have missed the bus and can\u2019t board another bus to reach your goals. The only thing is that you have to bear some extra cost for that i.e. you have to invest more in order to accomplish your goals.<\/span><\/p>\r\n<p><span style=\"font-size: 20px; color: #000000;\"><strong>3.) The amount doesn\u2019t matter<\/strong><\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">It doesn\u2019t matter how small you invest, what matters is the time period for which you are investing. Mutual funds provide investors with the flexibility of investing a sum as low as \u20b9 500 through SIP which is not at all a big amount even for young learners. <\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">You will be surprised to know that a monthly SIP of just \u20b9 1000 can get you a little over 97 lakhs in 40 years @12% p.a.<\/span><\/p>\r\n<p><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script> <ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-6495755798120621\" data-ad-slot=\"6499025866\"><\/ins> <script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/p>\r\n<p><span style=\"font-size: 20px; color: #000000;\"><strong>4.) Patience is the key to success<\/strong><\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\">If you are investing in mutual funds schemes especially equity-oriented then you must ignore the normal ups and downs of the markets.<\/span><\/p>\r\n<p style=\"text-align: justify;\"><span style=\"font-size: 20px; color: #000000;\"> An investor should remain focused on his\/her goals and invest and hold investments for the long-time period for optimum results.<\/span><\/p>\r\n<p><span style=\"font-size: 24px;\"><strong>Further Reading: <a href=\"https:\/\/www.livemint.com\/Money\/l9hhlA6Na4woFWQDDVC5OP\/4-rules-of-thumb-on-how-much-you-should-save-borrow-and-inv.html\" target=\"_blank\" rel=\"noopener noreferrer\">Livemint<\/a><\/strong><\/span><\/p>\r\n<p><img loading=\"lazy\" id=\"hmisiefip\" class=\"size-medium wp-image-562 aligncenter\" src=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-300x88.png\" alt=\"\" width=\"300\" height=\"88\" srcset=\"https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-300x88.png 300w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1024x299.png 1024w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-768x224.png 768w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1536x449.png 1536w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-2048x598.png 2048w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1200x350.png 1200w, https:\/\/budwisefunds.com\/blog\/wp-content\/uploads\/2019\/08\/download-pdf-button-1-1980x578.png 1980w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Realizing the need for making an investment is equal to achieving half a milestone. People often consider investing as the last thing whereas it should be there priority. Further Reading:&hellip; <\/p>\n","protected":false},"author":1,"featured_media":2110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How much income should I earmark for investment purpose?<\/title>\n<meta name=\"description\" content=\"Realizing the need for making an investment is equal to achieving half a milestone. 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