yes yes i know i know i have to do long term investing i have to invest for the long term only then i can achieve my life's goal only then i can achieve financial freedom but how much money should i invest for the long term how much money every month from my income should i invest for the long term now no one tells this right if you have this doubt then this video is for you in fact this is going to be an eye opener life-changing video for you i know it is tall claims but i'm definitely going to deliver i've built an excel sheet an ultimate financial planner with which you can plan your life and with which you can calculate how much money you should invest every month throughout your life so that you can achieve financial freedom and you can achieve all of your life's goals welcome to the 12th episode of the complete learning series of stock market investing and trading as always i put the entire series into a playlist the playlist is available here in the i button make sure you watch all the videos in the right order and learn really well let's all invest together and grow together yes in the series so far especially in the long term investment mastery class that we've started through the last video you've clearly learned what long-term investment is why you should be doing long-term investment and when to do long-term investment and all the basics about fundamental analysis as well and as we ended the last video the largest question is how much money you should be investing every single month and i'm going to give you a clear answer a subjective answer so that basically i've built an excel sheet and i will teach you how to operate this excel sheet so that all of you will get a subjective answer as per your life your lifestyle your expenses your future ambitions you will be getting an answer which is tailor made for you and that money is what you should be investing every month excited because in the next 15-20 minutes you're actually going to find out a number which is going to change your life which will help you achieve financial freedom so let's get started the name of charities welcome to market feed [Music] okay so what i've basically done is i've made an excel sheet and into the excel sheet you have to give some basic inputs inputs like what your current ages what is your planned marriages when are you planning to retire and what lifestyle are you maintaining maintaining now what lifestyle are you planning to maintain after retirement all these basic questions i'll be asking you you have to just input these basic details and the excel sheet will tell you what amount you should be investing every month at this point of life as as in this stage of your life at a later stage of your life and even at the time you're retiring cool you're going to get that magic number and after you get the number the next step is to start investing how awesome right and in order to make things even simpler i'm going to explain this by using two stories one story of an unmarried man and another story of a married man and for the fun of it for the video the stories that we are going to take us number one is of you know ajay right so aji is the unmarried man in our story today and the married man is our own we call him adi right so adi would be the married man and full disclosure adi is not married yet but it's almost all said he is planning to get married in the next few months so that is that so we'll be using their stories and their actual numbers and we'll put their actual numbers into the excel sheet and we'll see how much money they will have to invest so that they can reach financial freedom and they can achieve their life's goals how awesome right but before we get into that as i always do let's do a quick revision now before doing the revision if you have not seen the previous video the link is here you have to see the previous video so that this video makes a lot of sense to you now quick revision is two things number one is why to invest for the long term you all know this already right invest for the long term so that your invested amount grows at a pace faster than inflation and it grows into a huge corpus and this huge corpus huge money which have formed out of your investment will take care of all your future life's goals ambitions and will eventually make you financially free you will achieve financial independence the next thing to quickly revise is when should you be doing long-term investment when should you be putting money to buying stocks or mutual funds whatever you are buying for the long term so the answer is very simple right you can either do lump sum investments or you can do sip investment and as we have learned lump sum investment is when you have a huge amount of money with you all the money you are investing in one go sip is when you from your monthly earnings you are investing a fixed amount every single month or every single quarter or every single week it's up to you right that is why it is called systematic investment plan that is at a fixed time period you keep investing and as we have learned in the previous video sip mode of investment is always better when you're investing for the long term okay cool now we have all agreed on to the why of long term investment and when to invest for the long term you've all agreed to the fact that you'll all invest every month a part of your income for the long term cool now the big question is here right how much money should you be investing every single month who will tell you that's exactly what we are going to discuss in today's video now as we discussed in the last video there is a blanket umbrella rule to this which is very famous a lot of influencers keep talking about this but it is useless right anyways let's hear the ruling once again which is the 50 30 20 rule now the 50 30 20 rule basically says that out of your whole income 50 days you have to spend for your life's needs what are your needs food shelter transport all of those are your needs so 50 percentage of your income spend for your needs next is the 30 percentage of your income spend the 30 percentage of your income for your wants what are your wants you might have to go out to eat you might feel like going out and watching a movie you might want to buy a new phone all these are wants so 30 percentage of your income spent for once and the final 20 percentage of your income the rule says that invest that amount invest that amount for the long term now i completely or kind of completely disagree with this rule because this rule cannot be applied for everyone simply because different people have different lifestyles different earnings different aspirations and ambitions of life and different people want to retire at different ages and they want to have a different lifestyle after they retire as well so given that this can never be applied to everyone's life but this is better than nothing i would say 50 30 20 is better than not investing at all so if you start with this well and good but if you're actually planning to get better with investing if you're actually planning to meet your life's ambitions with investing if you're actually planning to become financially free with investing then you have to follow what i'm going to tell in this video and that's exactly where our excel sheet is going to help us which is actually going to make you a tailor-made custom-made plan which will tell you how much money you should be investing so that you can achieve your life's goals and you can become financially free so let's get into the excel sheet let's do that so as you see the excel sheet here let me tell you this again this is actually going to be a game changer a life changer for you this will tell you the number that you should be investing but more importantly this might even tell you that your current earnings is not enough with which you can become financially free eventually and you might be scared you might be intimidated you might be a bit sad also maybe after watching this video but this is being brutally honest here this is actually telling you the real honest truth to your face cool and no worries the link to download this excel sheet is given down in the pinned comment and description so after watching the video after learning how to fill and operate the sheet make sure you download the sheet input whatever data is relevant to you and find out the number and do one thing along with marking your attendance in the comment box make sure you also comment how much money you should be investing for the long term i'm absolutely thrilled to see what your number is cool then let's get started the first person we have selected for the story for the case study for operating the excel sheet as ajay ajit our unmarried hero for the story so i'm coming into the sheet and i'll give you some basic operation uh guidelines for the shade so if you look here this one tab here which says input data here and you have to basically give a lot of basic information about you here and if you go ahead whichever tab you go to whatever yellow cells you see only in the yellow cells you have to give an input everything else is calculated by the sheet itself cool then let's come to the very first tab so i've already collected all the data from ajay i'm just going to narrate you the story i've sat with aj i've asked him the right questions he has given me the answers i've put the answers here first question to him from me was what is his current age maybe you did not know this already he's only 23 years of age and i asked him when were you planning to get married he said 28 okay cool i've put in 28. now don't look into this right this is calculated by the sheet and it's shown here so you need not look there now the next question to him from me was what or when are you planning to be retired now very funnily he said 40 years first but let's be very practical here right my question to you is when when are you planning to be absolutely free planning to stop working completely planning to stop having any income source completely and that i urge you to put a very realistic number there only then you will get a realistic answer to how much you should be investing so though he said 40 then he said 50 but eventually he agreed that okay 60 is a realistic number so retirement age according to him is 60 and he is planning to live till 80. let's see how it goes right also the next input to be given here is inflation and we all know inflation in india is around six percentage but to be absolutely safe for our calculation we have taken inflation of seven percentage now my next question to him was if you're planning to get married by 28 do you have any financial goals before you get married and he said yes he said he wanted to actually build money or build a capital with which he can fund his own marriage with which he can go for honeymoon as well he actually said that so that's his goal number one his marriage and honeymoon number two as a goal he said was he want to buy a car by the time he turns 26 so 28 marries and 26 car these are the two goals that he said he wants to work for then i asked him don't you want to plan your retirement don't you want to plan for your financial freedom as well to which he clearly said yes then i opened three tabs for him okay we are basically going to see how he is going to plan for these goals which are listed here how much money he should be investing for these goals the first goal is the marriage goal right so he is currently 23 so i'm actually in putting 23 here right so 23 and the goal age is 28.
my question to him is what is your goals amount in current value that is ajay if you're going to have your marriage today as in today your marriage and your honeymoon today how much money would it cost and he said five lakh rupees maybe that's the amount he's planning so i put in five lakh rupees and see what happened here the gold amount is auto calculated by by the sheet that is by the age of 28 whatever is costing 5 lakh rupees today would cost 7 lakh 1276 after accounting for inflation right so at that age he should be having 7 lakh 1000 rupees so that he can take care of stuff which costs 5 lakh rupees today what are they his marriage and his honeymoon right so coming down if you see here everything else is calculated by the sheet itself the next input as you can see here the sheet is asking us is there any existing investment that you have or existing money that you have you would love to put in as a lump sum investment for the same goal and he said no zero i'm not planning to put in any other money as the lump sum investment for this goal i'll only invest every month from the age of 23 till 28 in order to achieve this goal and see everything else has been calculated by the shade and it says that if you are investing into an investment asset or an asset class which is growing at a cagr of 12 percentage every year all you have to do is invest 8 587 rupees every single month from the age of 23 till 28 so that you'll have 7 lakh 1276 by the age of 28 and you can take care of this goal cool or else it is even showing you that if your if your investment is giving only 10 percentage returns every year 10 percentage cagr growth every year then aj you have to invest 9056 rupees every month or in case if your investment is giving only nine percent a cagr every year then you have to invest 9298 rupees every single month now is a very intelligent person we all know that right he knows about the financial markets and he knows that this being a short-term investment plan this is only a five year goal that he's sitting right he shouldn't be investing a lot in the equity in fact his distribution his exposure should be more towards debt and less towards equity so he knows that realistically he can only make 10 percentage growth to his investment and because of that he knows from the age of 23 to 28 he should be investing 9056 rupees every month just in order to take care of this goal which is his marriage goal now his second goal was car goal right cargo he said he wants to bite by 26 and he wants to plan for a down payment amount of three lakh rupees and the three lakh rupees is in today's value and by 26 that would grow to actually three lakh sixty seven thousand five one three so the agenda here is he's 23 now by the age of 26 he should be having three lakh sixty seven thousand five hundred and thirteen rupees as you see here there's no lump sum amount is reserving he's investing for this goal and going by what the sheet is saying he has to invest believing that he can grow his investment by 10 percentage every year he has to invest 8796 rupees from the age of 23 till 26 in order to reach a corpus of 3 lakh 67 513 which he can pay as a down payment for his car cool moving ahead now the next question to him was if he wants to plan for his retirement even before he gets married how much money he will be ready to invest every single month so i said hey aj keep in mind that every month from 23 to 26 or 23 to 28 you're basically spending or investing 9000 rupees for your marriage and nearly 9 000 rupees for your car as well that is 18 000 rupees you're already investing when you're 23 to 24 25 26 and all by 26 the car investment amount is done but till 28 he has to invest in 9 000 rupees for his marriage even then i asked him based on your earnings right now how much do you think you can invest every month for your retirement goals for your financial freedom goals with which he said twenty thousand and from his answer i input here twenty thousand and i asked him how much money this is going to stay invested from 23 till your retirement age of 60. that's what he said here right he said he's planning to retire at the age of 60. so from 23 till 60 this is going to be here so where are you planning to invest this he said it would be in a balanced portfolio with good exposure to equity uh not bad exposure to debt and a lot of different asset classes as well and he said he would get 12 percentage returns on this so i put 12 percentage here and the number of years for which he's investing the amount is actually five why five because if you see here this is pre-marriage contribution to retirement post-marriage contribution to retirement will actually calculate separately so pre-marriage contribution to retirement is only for five years right from 23 to 28.
so that if you see every month if he invest 20 000 rupees for five years growing at 12 percentage every year at the age of 28 he would have a separate 16 lakh 49 727 rupees cool so far it's very clear basically if you see here if you look into ajay's life from 23 to 28 every month he's nearly investing 9000 for his marriage plan 9 000 for his car plan and another twenty thousand for his eventual retirement plan cool now my next question to him was see you're anyway is going to get married by 28 after marriage in at the age of 28 how much do you think would your monthly expense be post marriage monthly expenses this was my next question to him now there are a few assumptions here i said him okay now assume that at the age of 28 itself right when you got married you're going to have a kid as well not one kid how much ever kid you want to have eventually in your life assume that you have that many number of kids at the age of 28 itself do you get that my question to him was how many kids are you eventually planning to have in your life he said one now i said assume that at the age of 28 itself assume that you have that one kid and assume that you have all the expenses related to that kid cool then i asked him assume you are married now today what would your monthly expenses be please come to the sheet and input here in the yellow cells input all the expenses that you think you might be having today as a married man with the one eventual kid you're planning to have this is what i asked aj and this is what he filled okay he felt that rend he would be paying would be 25 000 rupees vehicle plan see he bought a car rate now he has to pay emi for the car everything is accounted here so that would be 20 000 rupees now he has wants insurance spends emergency fund setting up spends for all of those he's setting i said twenty five thousand rupees now we asked rajya why are you setting aside twenty five thousand rupees every month he said he have to do that right see even though he's only spending 10 000 out of this 25 000 another 15 000 would remain there maybe after six months this 15 000 would add up to 90 000 rupees and with that 90 000 rupees he might go for a short trip he might buy a new phone he might give a gift to someone right so he said once has to be 25 000 and that is one advice from my side to you as well when you are putting in wants plus insurance plus emergency fund put in a higher amount because that amount will really help you meet your life swans right the next one he said uh for his kid one kid he would be spending 10 000 rupees every month for the school fees and the tuition and the kids needs and wants stuff like that right then he said he would be spending or giving ten thousand rupees to his parents every month which is great obviously and eight thousand rupees every month he has tax expenses so adding this up is his uh entire expense per month now if you see here at the age of 28 when this would actually incur these are amounts in today's value now what i've done here is i've accounted for inflation and this would be the eventual amount which he would be spending at the age of 28 after accounting for inflation i know there is an assumption here right kid doesn't come at the age of 28 he might actually produce a kid only at the age of 30 or 31 but again we are taking these assumptions to be super safe in our calculations so that your life's planning will never ever go wrong so anyways at the age of 28 he would actually need 1 lakh 37 450 rupees every month to meet his life's expenses now if you come here to the very first tab the same amount 1 lakh 37 450 is taken here as expected post marriage monthly expense actually now starts the actual retirement planning now i'm coming down here moving down to retirement planning tab very very important right so retirement planning for him marriage actually happened at the age of 28 right he's planning to retire at 60 life expectancy is 80 right now coming down i want you to input something here existing investments remember pre-marriage contribution to retirement yes he had actually invested 20 000 every month and by the age of 28 he actually has a corpus of 16 lakh 49 000 now in the post-marriage retirement planning he's actually putting the 16 lakh forty nine thousand seven twenty seven here and that is growing at a twelve percentage for the rest of his life that is by the age of sixty this investment alone would grow to six crore nineteen lakh ninety 99 601 rupees cool coming back today his current annual expenses at the age of 28 was 16 lakh 49 401 where did this come from his post-marriage monthly expense which is 1 lakh 37 450 in the 12 which is 16 lakh 49 401 and if this is his annual expense at the age of 28 and every year his expense is growing at an inflation of 7 percentage he is living till the age of 60 and if he wants to retire then until the age of 80 if he wants to live with that amount alone then the corpus that he should make us 15 crore 36 lakh 25 023 rupees there are just two assumptions here assumption number one is after retiring inflation at that point would be eight percentage that is when aj is 60 to 80 years of age inflation at that point would be eight percentage and whatever corpus he's building which is 15 crore rupees that he will actually put into an asset which would grow at a rate of eight percentage maybe a liquid fund would do liquid debt fund we'll learn about those later no worries at all and that itself would grow at an eight percentage rate so if that is actually happening and the next assumption is that post retirement his annual expenses would come down by 25 percent age would do right because his kid is not dependent on him anymore he doesn't have to travel as much as he used to travel before so obviously post the age of 60 his expenses would come down how much the expenses post retirement would be 75 percentage of the previous expenses that is a 25 percentage cut in expenses i would i have taken if you think that your expenses would come down by 75 percentage if your post retirement expenses would only be 25 percentage of your previous expenses then put here 25 percentage i hope you understand that anyways as per this calculation his corpus required to retire by the age of 60 is 15 crore 36 lakh 25 000 023 rupees and guess what coming down if he's actually growing his money at the rate of 15 percent a cagr all he has to invest is 16 420 rupees every month from the age of 28 till the age of 60 and he can be financially free not the point at the age of 28 he's actually getting married his wife would also have an income so even if he is investing 16 000 rupees every month he has a monthly expense anyways right monthly expense of 1 lakh 37 000 every month and he's investing another 16 000 the same month basically he has to have a monthly income of nearly what one lakh fifty five thousand to one lakh sixty thousand that is his income plus his wife's income still things could be taken care of now let's be some like very realistic here right maybe he wouldn't be able to make 15 cagr every month he being he he can maybe make 15 percentage returns but a normal person might only be able to make 12 percentage given the fact that you're investing into a very balanced asset class with a lot of debt exposure bond exposure and whatnot so if you are actually planning to make a 12 percentage returns on your investment for the rest of your life you have to invest 34 409 rupees every month remember thirty four thousand investment here plus a one lakh thirty seven thousand rupees monthly expense so that is nearly one lakh seventy thousand one lakh seventy five thousand expense every month which means that your monthly income should be above 1 lakh 75 000 not just your income yours plus your spouse's income cool do you think you can do this anyways you definitely have to come to the calculator put in your values and then you can get your amount now you might think everything has ended here other can easily achieve financial freedom no see here planning has come only till her marriage now he has planned for his retirement now he can have other plans as well he can plan for his kids marriage he can plan for a foreign trip at the age of 40 maybe he can plan for building a house maybe right all other plants can also be made and for that i'm actually showing you a tab here and example goal planning that he does not need to plan now only when he reaches at the age of 30 when he actually has the goal he can come here he can put in his age when then this is after six seven years he can actually tell that his age is 30 his goal in the current value would be 20 lakhs and the goal age is 55 and the sheet will tell him how much money he will eventually have to invest every month for that goal which has to be planned then for now all aj has to plan is his marriage his scar and his eventual retirement all which is already planned for amazing right then he asked me shari can i plan for my house as well i said why not you plan for your house as well so i ask him a few questions he give all the inputs i've put all the inputs here and you can see the answer here current age again is 23 age of building house is set as 45 and house inflation in india currently is real estate price inflation that's nearly four percentage i have already put in that and i asked him what is your dream house current price he said 80 lakh rupees now his dream houses cost when he turns 45 would be 1 crore 89 lakh rupees after accounting for four percentage inflation now you asked him how much percentage are you planning to give down payment he said 30 percentage now that would be 56 lakh 87 000 rupees right now let us talk about the house loan here so loan amount would be see if he is already making the down payment of 56 lakh rupees the down payment would be one crore 32 lakh rupees and loan interest would be around seven percentage and loan tenure would be 20 years basically he's taking the loan at 45 so 20 years taking us he's actually paying back the loan by the age of 65 and this actually said that if his investment every month would grow at a rate of 12 percentage all he has to invest is only 4 389 rupees every month if he actually does that by the age of 45 he will have an amount of 56 lakh eighty seven thousand rupees which he can actually give as down payment he said hey that's all cool i can easily invest another four thousand three eighteen rupees but i said this this is all cool you invest four thousand rupees every month from the age of 23 till the age of 45 you can easily give the down payment but after paying the down payment you will have to actually pay a loan emi amount of 1 lakh 2 297 rupees every month for the next 20 years of your life and he said hey if i'm actually living in a rented house i would only pay a rental rent amount of what 65 70 000 rupees then accounting for inflation this is one lakh rupees plus which i'll have to pay for pay a cmi and he said okay let me consider let me rethink about buying a house and he has gone away he might not buy a house so this is all very critical when you plan your life have your goals very well defined put numbers to it see if they can be planned see if you actually have the money to be invested with which you can realize the plan only then you'll actually succeed in your financial life anyways so far is super simple right aji has a person who is only 23 years of age now for the next nearly five years of his life he is investing nearly 38 000 rupees every single month and after that after getting married as we saw here post-marriage no sorry in retirement plan as we see here since he's going for a 12 percentage growth only that's what he's assuming he's investing 34 000 rupees every month after his marriage along with his spouse's income as well and he is set for life he might have other goals as well here and there some other goals also which might require another five ten or even twenty thousand rupees every month even then post marriage he's only investing thirty four thousand plus another twenty thousand fifty four thousand every month with his plus his spouse's income and he actually felt confident to live his life now he actually said that i can actually see achieving my life's goal and achieving financial freedom now amazing right i really want you also to feel the same and i know maybe based on your income numbers might not work for you what is the only solution there increase your income or reduce your expenses you'll actually have to make those modifications only then you will be able to meet your financial goals dreams and aspirations now let's quickly go to aadhi's story and also understand adi being a married man how he is planning your life now i know among you there will be unmarried people you can follow planning as how are jaded now there will be married people as well now you can follow plans as to how adi is planning his life now all inputs are already given here i'll quickly go through it you'll easily understand because i've taken quite a lot of time to explain ajay's planning right now adi's age is 26 uh he's he's married also at 26 and his retirement age again he's planning to be a get retired at the age of 60 and life expectancy again is the same of 80 and inflation a seven percent age so what after all calculations what he understand is the fact that he needs a retirement corpus of 18 crore rupees to retire and i'm quickly jumping into this what he understands is he has to invest 33 109 rupees every month into something which grows at 12 percentage cagr every year then he can easily achieve financial freedom and again i'll give you some clarity here right for 15 percentage returns what you have to do see as you can see here if your investments are invested in different asset categories like shares which are direct stock investments mutual funds fixed deposit provident fund etc then there is a chance that your investment can grow at a rate of 15 percentage but if you are a bit risk-averse you want to be super safe and if your investments are invested in different asset categories like just mutual funds fixed deposits provident fund gold etc then it can grow at 12 days now this is doable by everyone but to pick the right stocks and invest and grow it at a 15 percentage requires some skill which we would learn right so for very very very high safety let's assume that ajay and just like that adi is also only assuming a 12 percentage growth rate in that case adi has to invest 33 109 rupees from the age of 26 till the age of 60 and then he can actually make a corpus of 18 crore 85 lakh rupees with which he can easily be financially free he can easily retire now i'll go through the other tabs also to make things very simple here since this is a married person the first question itself is post-marriage monthly expense because pre-marriage plans are anyways not there so the first question is post-marriage monthly expense so whatever monthly expense that you think you are incurring today you can put it here and the retirement planning tab will take everything and will calculate and tell you what amount you should be investing every month and the amount here is mostly zero now if you are a married person and if you are planning to start your investment journey today and if you already have some saved up amount with you maybe you have 10 lakh rupees with you right put in that 10 lakh rupees here and see calculations have changed here now you have to invest only 24 000 rupees now adi does not have any money invest saved up or invested so he is putting zero here so that he has to invest thirty three thousand one hundred and nine rupees every single month now he asked adi is retirement your only plan he said no he said he wants to have a kid and he wants to plan for the kids marriage as well and that's why he already planned for his kids marriage here now his age is 26 you can put your current current age here he is planning to have his goal at his age of 51 that is by the time his kid might be in between 20 to 25 then right so he's planning to have his kids marries then and the current value of the goal is 10 lakh rupees that is i asked dhadi if you were to have your kids marriage today how much would you be spending he said 10 lakh rupees so the current amount i put 10 lakh and the inflation adjusted amount by the time he's 51 is 54 lakh rupees and for this goal he's not saving up any money up front and for this he has to again invest another 2 818 rupees every single month till the age of 51. clear then he also said that he has to he wants to go for a foreign trip by the age of 30 that is in the next four years so then uh i asked him what would be the expense for that he said five lakh rupees today so by the age of 30 the goal amount would be six lakh fifty five thousand rupees he's not investing or saving up any money up front so if it's actually growing that money at a rate of ten percentage because again just a four years investment right so it has to be in a high debt exposure investment asset class so it's only getting 10 percentage he has to invest another 11 000 161 rupees every month only then he can go for his dream for interest by the time he turns 30.
