Everyone dreams of accumulating wealth in a short period, mainly due to concerns about their future, children's education, and retirement. If you are also looking for a structured investment plan, then the 12-15-20 formula can be your gateway to becoming a millionaire by 40. This strategy revolves around investing wisely and consistently to achieve high returns in the long run.
Becoming a millionaire is not luck or rocket science, you just need to know how to invest properly. If you also want to become a millionaire by the age of 40, then the 12-15-20 formula can be very helpful for you. In this formula, 12 means 12 percent return, 15 means investment for 15 years and 20 means investment of 20 thousand rupees every month. With the help of this formula, you can start investing at the age of 25 and accumulate a fund of crores of rupees by the age of 40.
Understanding the 12-15-20 Investment Formula
The 12-15-20 formula is a simple and effective investment strategy:
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12% Return: Invest in assets that have the potential to offer an average return of 12% annually.
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15 Years: Continue your investment for a minimum period of 15 years.
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20,000 INR Monthly Investment: Start investing 20,000 INR per month in a reliable financial instrument.
By following this disciplined approach, you can accumulate over ₹1 crore by the age of 40, ensuring financial security for yourself and your family.
Where to Invest for 12% Returns?
One of the most recommended investment options to achieve 12% annual returns is Mutual Funds via Systematic Investment Plan (SIP). Mutual funds have historically provided double-digit returns over the long term. Before selecting a fund, analyze its past performance, fund manager’s strategy, and expense ratio.
SIP Investment Calculation for 15 Years
If you invest ₹20,000 per month through SIP, here’s how your investment grows:
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Total Investment: ₹36,00,000 (₹20,000 x 12 months x 15 years)
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Estimated Interest Earned at 12% Return: ₹64,91,000
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Total Wealth Accumulated: ₹1,00,91,000
With compounding interest, your money grows exponentially over time, helping you reach your financial goals faster.
How to Start Investing?
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Select a Reliable Mutual Fund: Choose funds with a consistent track record of delivering 12%+ returns.
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Open a SIP Account: You can start a SIP via any reputed mutual fund platform like Groww, Zerodha, Coin, or Paytm Money.
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Stay Invested for 15 Years: Avoid withdrawing funds early to maximize compounding benefits.
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Diversify Your Portfolio: Invest in a mix of large-cap, mid-cap, and small-cap funds for balanced growth.
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Increase SIP Amount Annually: If possible, increase your investment by 10% every year to accumulate even more wealth.
Who Can Follow This Formula?
If you have a monthly income of ₹60,000 or more, investing ₹20,000 should be manageable. Financial experts recommend investing at least 30% of your income to build wealth effectively.
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Conclusion
Becoming a millionaire by 40 is not luck but a result of smart and disciplined investing. By following the 12-15-20 formula, you can secure your financial future and achieve your dreams. Start your SIP today and watch your wealth grow exponentially!
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