12-15-20 formula SIP: How you can build Rs 1 cr corpus in 15 yrs by using this SIP formula | Know here
SIP Investment, Retirement Planning: The idea of accumulating a large sum, like Rs 1 crore, may seem impossible given your daily expenses. But what if someone tells you it’s highly achievable — with the right investment strategy? To make the most of SIP investing, you can follow the 12-15-20 formula. Know how it works -
SIP Investment, Retirement Planning: As a salaried person, you might often wonder how to create a sizable corpus for your retirement or even for your grandchildren’s future. The idea of accumulating a large sum, like Rs 1 crore, may seem impossible given your daily expenses. But what if someone tells you it’s highly achievable — with the right investment strategy? The key is to invest in options that have the potential to outpace inflation. However, there’s a catch: You must be disciplined about your investment.
So, what’s the best investment option to consider? One popular choice is Systematic Investment Plans (SIP) in mutual funds. By committing to regular monthly contributions, you can accumulate a significant corpus over time — without needing a large lump sum upfront.
Investing in Mutual Fund SIPs
With SIP, you invest a fixed amount every month in mutual funds, allowing you to harness the power of compounding and benefit from market growth over time. This strategy can help you build a substantial corpus, even with modest monthly contributions. To make the most of SIP investing, you can follow the 12-15-20 formula.
12-15-20 SIP Formula
The formula of mutual fund investments through SIP (Systematic Investment Plan) - 12-15-20 - is an investment strategy that will help a person to build over Rs 1 crore in just 15 years. Let's know-how -
SIP Investment: How does the 12-15-20 formula of SIP work?
In the formula - the "12" denotes the anticipated returns, with an average SIP return considered to be 12 per cent, "15" signifies the number of years, implying that you need to invest in SIP for 15 years, and "20" represents a monthly SIP of Rs 20,000.
12-15-20 SIP Formula: Calculating average investment
Applying this formula, if you start a monthly SIP of Rs 20,000 and continue it for 15 years, then you will invest a total of Rs 36,00,000 in 15 years.
12-15-20 SIP Formula: Calculating average capital gain
Calculating the average expected return of SIP at 12 per cent, a total of Rs 64,91,520 will be received as a capital gain on this amount in 15 years.
12-15-20 SIP Formula: Calculation to create a corpus of over Rs 1 crore
Consequently, at the end of 15 years, including the principal investment and capital gain, you will get a total of Rs 1,00,91,520.
12-15-20 SIP Formula: You become a crorepati in 15 years
Therefore, by using this formula you will possess a substantial amount of Rs 1,00,91,520 and become a crorepati in just 15 years.
Benefits of SIP
SIP offers significant benefits, primarily due to the power of compounding. The longer the SIP duration, the greater the compounding benefits.
SIP offers growth potential
With an average annual return of 15 per cent, SIPs offer substantial growth, outperforming many other investment schemes.
SIP offers growth potential
Additionally, the rupee cost averaging feature ensures that expenses remain stable, even during market fluctuations.