Earning Rs 1 lakh a month? Feroze Azeez of Anand Rathi Wealth reveals how the rich multiply their money

For many young professionals in their late 20s and early 30s, earning Rs 1 lakh a month represents a comfortable milestone. But according to Feroze Azeez, Deputy CEO of Anand Rathi Wealth, what truly determines financial freedom isn’t the size of your salary — it’s how you use it. In a recent conversation, Azeez outlined a simple but disciplined wealth-building strategy for Indians who earn Rs 1 lakh a month, focusing on financial planning over emotional spending.

Azeez’s first advice is counterintuitive in a country where home ownership is seen as a symbol of security: don’t rush to buy a house. For someone earning Rs 1 lakh, taking on a Rs 50–60 lakh home loan early in life can choke cash flow, reduce investment capacity, and create long-term financial stress. Instead, he advises renting during the initial wealth-building phase. “In the early years, your savings rate matters more than ownership. A house can wait — compounding can’t,” he explains.

Next, Azeez breaks down how that Rs 1 lakh should ideally be allocated. Roughly, Rs 30,000–Rs 35,000 should go into SIPs (Systematic Investment Plans) every month. Equity mutual funds, he notes, remain the most effective vehicle for long-term wealth creation in India, offering inflation-beating returns through the power of compounding. Over 20 years, a Rs 35,000 monthly SIP at an average 12% return could grow to more than Rs 3 crore — entirely from disciplined investing.

Another Rs 20,000–Rs 25,000 can be set aside for fixed income or debt instruments, like debt mutual funds or fixed deposits, to provide liquidity and stability. This creates a buffer for emergencies and helps balance risk without derailing growth. “Liquidity is your friend. Having 6–12 months of expenses in a liquid form ensures you never break your equity investments prematurely,” Azeez says.

The remaining amount can cover living expenses, rent, insurance, and discretionary spending. Importantly, he emphasizes avoiding lifestyle inflation — the trap of increasing expenses every time income rises. “Wealth is not what you earn, it’s what you keep and grow,” he reminds.

Tax efficiency is another pillar. Investing in ELSS funds or using tax-advantaged instruments under Section 80C can reduce tax outgo, allowing more money to be deployed productively. Azeez also highlights the role of discipline and automation. Setting up automatic SIPs ensures consistency and removes emotional decision-making from investing — a crucial factor during volatile markets.

For those wondering about real estate or gold, Azeez believes both have a place — but later. Once a solid investment base is created and passive income flows build, purchasing property for use or investment can make sense. Gold, meanwhile, can act as a hedge but should form a small percentage of the portfolio.

His core message is simple: the first decade of your career is your compounding runway. Smart allocation, patience, and avoiding big-ticket emotional decisions can set the stage for financial independence well before retirement. “Wealth-building isn’t about sudden windfalls,” Azeez concludes. “It’s about structure, time, and consistency.”

 

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