Rule of 144: How long will Rs 6 lakh take to turn into Rs 24 lakh? Find out through this investment rule
Learn how Rs 6 Lakh can grow into Rs 24 Lakh using the power of compounding. Understand the Rule of 144, investment strategies and key factors.
Compounding is a powerful tool that can turn your Rs 6 Lakh investment into Rs 24 Lakh over time. By understanding the Rule of 144, you can estimate how long it will take for your money to quadruple, depending on the annual return rate. Whether you're planning for retirement or long-term financial goals, harnessing compounding's power through regular contributions and disciplined investing is essential for exponential growth. Learn how to make your money work smarter and harder with compounding.
Understanding the Power of Compounding
Compounding allows your initial investment to grow exponentially by earning interest on both the principal and accumulated interest.
The Importance of Long-Term Investment
Over time, the growth of your Rs 6 Lakh investment accelerates through compound interest, helping you reach Rs 24 Lakh.
Using the Rule of 144
The Rule of 144 helps estimate how long it will take for your investment to quadruple based on the annual return rate.
Formula
Years to Quadruple = 144 ÷ Annual Return Rate (%)
How your Rs 6 lakh can turn into Rs 24 lakh?
Calculation:
Years to Quadruple = 144 ÷ 12 = 12 years
Since Rs 6 lakh needs to quadruple to reach Rs 24 Lakh, it will take approximately 12 years at a 12% annual return rate for the investment to grow to Rs 24 lakh.
Impact of Higher Returns
The higher your annual return rate, the shorter the time needed to turn Rs 6 lakh into Rs 24 lakh, thanks to compounding.
Patience is Key
While achieving a 36% return may seem ambitious, it emphasizes the importance of patience and staying invested for the long term.
Regular Contributions Enhance Growth
Consistent contributions through SIPs or other investment methods can further accelerate your investment growth, helping you reach your goal faster.
Risk and Market Volatility
Market volatility can impact returns, but long-term compounding helps reduce risks by smoothing out short-term fluctuations.
Stay Disciplined and Focused on Your Goal
Keep a disciplined approach to investing, regularly contributing to your investment, and focusing on long-term financial goals.