Everyone aspires to live a prosperous life free from financial problems. To achieve this, it is crucial to have a sufficient amount of funds, and the way to accumulate funds is through investment. The earlier you begin investing, the faster you can amass a substantial amount of money. However, it is important to select an investment scheme that offers lucrative returns. Read on to learn about a specific strategy or formula that can make you a millionaire by the age of 40.
Becoming a millionaire is not an overly complex task; it simply requires adopting the right investment strategy. In this regard, the 12-15-20 formula can be extremely beneficial. The number 12 signifies a 12% return, 15 represents the number of years you should invest, and 20 implies that you need to invest Rs 20,000 every month. By following this formula and initiating investments at the age of 25, you can achieve millionaire status by the age of 40.
The question arises as to where one should invest to obtain a 12% return. The answer lies in Systematic Investment Plans (SIPs). SIPs involve investing in mutual funds, which are connected to the market. Although the returns from mutual funds are not fixed, financial experts generally consider their long-term average return to be around 12%, or even higher.
If you invest Rs 20,000 every month in mutual funds through SIPs, your total investment over 15 years will amount to Rs 36,00,000. According to the SIP Calculator, you will receive Rs 64,91,520 as interest at a rate of 12%. Consequently, after 15 years, you will possess a total of Rs 1,00,91,520.
One may wonder how to afford Rs 20,000 for investment purposes. Let us clarify that if your monthly salary falls between 65,000 to 70,000, it is feasible to allocate Rs 20,000 per month for investment. Financial guidelines suggest that individuals should invest at least 30% of their earnings. Therefore, if you earn Rs 65,000 per month, 30% of it amounts to Rs 19,500, which is approximately Rs 20,000. Consequently, you can easily allocate this amount for investment.
Systematic investment work very well
But the investment dates should be when markets are low.
Pinky high markets lure us but will be on high net asset value. And averaging time is too long till then we have pump in more money..
Instead weekly or fortnightly investments give a clear monitoring stand
Such hi recommended actions take us to covid and aftermath when we shdnt be scary but wait calmly like a cook cucumbers