Full transcript of “Get 1 Month's SALARY For FREE! | How to Escape the Middle Class Trap | Ankur Warikoo Hindi”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 Earn 13 months salary by working for 12 months. How? Through an Excel sheet. This video will have two parts. A bitter truth which is important to know because the solution of this bitter truth is the second part of the video where we will see through an Excel sheet how you can add a whole month's salary to your yearly salary for free without doing any work. First the bitter truth. The bitter truth is that this world is becoming more difficult for the middle class. And this is not a recent thing. This is going to remain for the next 10-20 years. There are many reasons. The biggest headline is that our real income in the last 10 years and real means the income which is measured in terms of the status or position of money. What is this money able to
0:47 consume and purchase has actually declined. Buy about 12% means that 10 years ago a person could buy a thing worth ₹100 by earning ₹100. Today we are earning only around ₹88. But I have to buy the same things worth ₹100. So the value of our money has reduced in 10 years. Now there are many reasons for this. But the biggest reason is that it is often seen in democracy. And this is not just about India. This happens in every big democracy and small democracy too. There are two focus areas. One is the poor population and the other is the mass population. By giving subsidies and incentives to these people, you attract them to vote for you. Because these are popular schemes, populist measures. And second are very rich people because they
1:33 fund the campaigns and the elections. Private participation is allowed. So the middle class gets caught in the middle. Those with salary deed who pay tax on their income. Then whatever you buy with the money that comes after tax, pay tax again. If you invest then pay tax on its profit. So there is constant squeezing of this middle class. This no cannot change. This is in a way the nature of democracy. Social security will not come to our country for a long time. Because we are still a very poor country. We are still a very developing country. We still have lots of problems to fix. And that's just the reality. Now I don't make such videos
2:20 because frankly I am not a pessimist. I am an optimist. I love this country very much. Today I have many options to leave this country and go anywhere else but I choose not to, in fact 20 years ago I left the US and came back to this country because this is so much happening, this is our space, this is familiar space, family is here, people are mixed, there is a certain sense of home that I feel here and if this is true, but what I just told you is also true, so they have to be away from there because we cannot sit idle. I cannot say that brother, it is what it is. Now we can't do anything. You will keep on suffering, right? You will have to achieve victory. And one way to achieve that victory is
3:05 what is long term discipline investing. I want to show how through long term disciplined investing you can reach a point in just a few years where you can automatically generate a 13th month salary without having to work. Ten making you more and more financially independent and not part of this red race where only by earning money you can survive. Let's Try and Understand Excel Let's play Excel. Alright so in this sheet if we take the year then it can be ₹225 whatever it is. At the end of year number one, let's assume that your monthly salary is Rs. 25,000 and then your annual salary is Rs. 3 lakh. Let's assume that your salary is growing at 5%.
3:53 This is not a very low number. Actually he is higher. On an average, salaries are growing at the rate of 3 to 4%. Inflation is also not being beaten. And now you have to start making an investment. Ideally I say that you should invest 20% of your salary. But I want to show you how even with 10% you can generate a 13th month salary. So, on a base of ₹25,000, you will invest ₹2,500 every month. Let's assume a mutual fund through SIP. That SIP gives you 12% on an average yearly return. What is the base or foundation of 12%? If you look at Sussex or Nifty over a long period of time 10, 20, 30 years, it has been greater than 12%. So we have assumed 12% as a
4:39 conservative number. So how much of your own money did you invest in one year? ₹00 which is this ₹2500 * At the end of 12 years, you would have roughly ₹32,000. Meaning you earned around ₹1800. Many people look at this ₹31,800. He says, friend, I have got a good amount of money. But out of this, ₹00 is yours. So you have done this saving by force. But that means the money lying in the bank. This ₹1800 is your actual earning. And at this point you might want to slap me that I will spend everything on the excel sheet, then do SIP and by doing all this I will earn ₹1800. He said, I earn Rs. lakhs per year. For ₹1800 I will watch this video.
5:28 But this is the story of one year and you know what happens, many people see this story of one year and they lose their faith and say that this is nonsense, nothing is going to happen with this but it is something that is the reality, we will see what happens in the future, so we are asking a simple question, does the income exceed the monthly income, it has come till now, meaning it may not come in the near future. We are earning ₹25,000 a month. He did not even earn ₹1800 in a year. That is what it is. Let's see what happens next year. Your salary is now after 5% increment. ₹26,250, that is ₹15,000 per year, the same 10%, we will
6:14 not change it. Actually you can change this to any point you want. All these sheets are flexible. We will pin this sheet also. Pin it in the description in the comments. You can download it and play with it. They will assume investment growth to be 12%. But now instead of ₹500 we are investing ₹2625. Now your own money has become ₹61500, at the end of the year you will have ₹65190 meaning now you have earned ₹3690, this also seems like a joke right now. We earned ₹2250 monthly salary, ₹3690 in a year, Ankur is very far away. Tell me quickly whether something is going to happen or not? In the third year you are investing around Rs 2700.
7:02 And now you have earned ₹5675. Ankur guy is still getting slapped a bit. Now in 4 years you have earned around ₹760. Your monthly salary has increased to ₹28,900 40. Now let's see what happens in the next 10 years. Means after a total 10 year journey, your salary after 10 years is around Rs. 38000 and you are earning around Rs. 22640 per year, means even after 10 years, you have not been able to match one month's salary. Which is a reality because you are investing only 10%.
7:48 You are generating only 12% growth. Which is fine. Let's move forward and see what happens. Slowly, friend, if you move ahead, there will come a point which is the 23rd year, you will be earning ₹73132 per month and at the end of the year, you will earn ₹74000, meaning at this point, one extra month has been added to your salary. You work for 12 months, but now you are getting salary for 13 months without working for even a single month. Because your investment has started generating an income equal to your monthly income. And this will
8:35 continue for the rest of life. You can pull it down as much as you want. So even after 30 years, you would be earning around ₹1 Lakh. But you will be earning ₹1,19,000 through your investments alone. And this my friend is the way to beat the middle class track. These numbers are very conservative. Now let's see what happens if you increase these numbers. So let's say we do 20% investment. Meaning the same salary of ₹25,000 but instead of ₹500 we are now investing ₹5,000 every month. Look at what happens. You will beat your monthly salary in just 9 years. Per month you are earning around ₹37,000 and per year you are earning around ₹4,000 which means
9:24 one month's salary free has been added to your one year's salary. Let's see what happens when we go down. By the time we reach the age of 30, if you maintain the same returns, you would be earning the same Rs.12,000 but now 2 months' salary would have been added to your salary. Because you are through your investments making ₹40 a year. Meaning you are working for 12 months. Earning money for 14 months. This is again adjust by 12% lets say it becomes 15 which is not unreasonable. If you take a little risk and manage it well, it can reach 15%. Above this, off course, it gets a little
10:10 tricky. But let's say that you will add one more month to your salary in just seven years. Within 20 years, you would be adding ₹150000 more to your ₹63000 salary. Meaning two and a half months' salary is free and by the time you reach the age of 30, you will be adding 3 months' salary to your annual salary. Meaning, by earning for 12 months, you will be earning the salary of 15 months. That's the power of disciplined investing. Many people just don't see this thing. I also often talk about this thing that hey if you start with ₹500,
10:59 give 5% annual step up, then at 15% return you will have ₹42 lakh after 30 years. Another way to look at it is that every year you will be earning 3 months of salary for free. If the same salary growth is 3%, which is usually common in very traditional organizations or traditional industries like manufacturing etc. So the match has taken place within just six years. By the time you reach the age of 30, your monthly salary is only around Rs 59,000. You are earning ₹14,000 per year. Close to four times. And that 's just the reality of how things are. Now I do realize that in a low salary it becomes
11:45 difficult to invest this 20%. But you can make the changes at a year level well. So you can say that friend, from 25 till I reach 50, I will do only 10%. After that I will do 20% and you make it 20. And you will see a difference and you will figure out what it is. And you see, after 30 years, ₹ 1 lakh is your salary. You are earning Rs 2.5 lakh per year. Over and above the money you have already invested. Meaning you are getting two and a half months' salary for free. And keep playing around. Keep playing around with the sheet so that you know at what point you
12:32 can add one more month to your 12 months salary. Because that is just free money driven by your discipline. I hope this was useful and I hope that you use this as a way to escape the middle class trap. Signing off on Thursday. My fourth book on career is written in a very simple, very relatable and very practical way. I wish someone had given me this book when I was 24 years old and totally confused about what to do about my career? What direction should I take in my life? I have written this book for that same 24 year old Ankur. It is written for you.
