Self-made millionaire Ramit Sethi says ‘invest 10% of your salary every year’. Here's why

Self-made millionaire Ramit Sethi said, "Invest 10 percent of your salary every year. And at the end of the year, increase that by 1 percent.

Self-made millionaire Ramit Sethi shared advice for young professionals that can help them become millionaires. He said, "Invest 10 percent of your salary every year. And at the end of the year, increase that by 1 percent. Do this for as long as you can and you will be a multimillionaire.”

Ramit Sethi suggested that if you are new to investing you could start with low-cost index funds.

Suggesting that if you are new to investing you could start with low-cost index funds and follow the stock performance of big companies, he said, "By investing in an index fund, your money is spread across a wide range of companies, which automatically diversifies your portfolio. And since index funds are passively managed and simply aim to mimic a market index’s performance and returns, they tend to have lower costs than actively managed funds."

The key to investing is to start sooner because “when you begin early, you give your money a longer amount of time to grow through the power of compound interest”, he said.

He added, "If 10 percent seems steep to you, don’t panic. It’s okay to start by setting aside what you can and work your way up to a larger portion of your income down the road. By starting at your college graduation with your first job, you will set yourself up for a lifetime of living a rich life.”