Can you ever imagine that you too can become a millionaire with the money accumulated through small savings? Perhaps your answer will be no. By making small savings, people often remain happy thinking that they have enough money safe by depositing money in the small savings schemes of the government or in the banks.
But, you will be surprised to know that you can become a millionaire one day with the same money that you are happy investing in the bank or general government schemes. Now this question will definitely arise in your mind that how is this possible? So know that this is completely possible. For this, you will have to follow the rules and special formulas of SIP i.e. Systematic Investment Plan regularly and sincerely. One of these miraculous formulas of SIP is a very popular formula. 12x12x24 Is. If you start investing your savings using its correct methods and mathematics, then you can definitely become the owner of at least Rs 2 crore.
What is SIP and how does it work?
Systematic Investment Plan is called SIP in short. SIP is considered a very powerful and modern means of investing in mutual funds. When an investor invests money in mutual funds through SIP, Asset Management Companies (AMC) invest that money of the investors directly in the stock market. This gives investors much higher and bumper returns compared to fixed deposits (FD) and traditional savings schemes. The biggest advantage of investing in mutual funds through SIP is that investors get tremendous benefits of 'compounding' (compound interest).
How is money deposited in mutual funds?
Mutual fund is a collective investment scheme in which many investors of the country pool their money and invest in stocks, bonds and other financial securities. These funds are professionally managed by skilled asset managers, also known as portfolio managers. Before investing in mutual funds, it is very important to know some important things related to it. In this, the money of all the people investing is collected in a collective pool and then it is invested in different places. The total profit from these funds is divided among all the investors in the ratio of their contributions.
What is the 12x12x24 formula of SIP?
This entire mathematics can be understood with an easy example. Suppose your age is currently 24 years. At this stage of your age, you started investing Rs 12,000 every month in a mutual fund of a good company through SIP. Now you have to keep investing Rs 12,000 continuously every month for 24 years without missing a single month. Over this long period, you will get an average annual return of 12% on this investment. Generally, 12% to 15% return is available in mutual funds through SIP, but to make you understand, we are telling you the calculation according to the lowest interest rate. When you continue investing in a SIP plan for such a long time, you will end up with a huge corpus over a period of 24 years.
How to earn Rs 2 crore from SIP 12x12x24 formula?
You can understand this in the easiest way. If you deposit Rs 12,000 every month continuously for 24 years from the age of 24, the total investment amount made by you in these 24 years will be around Rs 34.56 lakh. Now add interest at the rate of 12% on the total investment of Rs 34.56 lakh, then you will get only about Rs 1,66,16,246 as return.
Now if you add this Rs 1,66,16,246 to the total Rs 34.56 lakh invested by you, then the original amount of investment and the amount of return together will be Rs 2,00,72,246 i.e. More than Rs 2 crore You will have a huge amount of money. The most important thing about this entire equation is that you will accumulate this huge amount of money when you are only 48 years old. This simply means that you can take retirement much earlier than the traditional retirement age (58 or 60 years) and live your life comfortably, becoming completely financially independent.
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