Economic security is everyone’s priority after retirement. For this, it is important that financial planning should be done in time. SIP (Systematic Investment Plan) in mutual funds is an option in which big funds can be prepared from small investment. Especially for those who want to become rich quickly, 12+12+20 formula of SIP is very effective.
What is 12+12+20 Formula?
The first “12” in this formula shows an investment of ₹ 12,000 every month. That is, if you start a SIP of ₹ 12,000 every month at the age of 30, then you can become a millionaire by the age of 50. The second “12” indicates an estimated return of 12% annually. It is common in mutual funds to get 12% returns on long -term investment, although it is not guaranteed.
The third number shows “20” to the duration of investment. If you do SIP of ₹ 12,000 for 20 consecutive years, then you will invest a total of ₹ 28.80 lakh. According to 12% annual return, this amount can increase to about ₹ 1.10 crore.
For whom is this formula of SIP?
This formula of SIP is ideal for those who want to invest from discipline and become financially independent before retirement. Its biggest feature is that you do not have to invest a lump sum amount of money, but every month you can prepare a big fund with a small amount. It is important to keep in mind that patience and discipline are very important while investing in SIP. Despite market fluctuations, continuing investment is the key to the success of this formula.
Before investment, make a plan according to your need and goal with the help of SIP calculator once. At the right time, the right investment can not only make you a millionaire, but you can free you from the tension of money even after retirement.