The 8-4-3 Rule | Power of time in SIP Investments

Imagine you decide to invest ₹20,500 every month for a period of 8 years in an investment with ROI 12% annually. At the end of this period, your initial investment will have multiplied to ₹33 lakhs.

Over the following 4 years, your investment will double yet again, reaching another ₹33 lakhs. Then, in the subsequent 3 years, it will grow by an additional ₹33 lakhs.

In summary, within a span of 15 years, your initial ₹36 lakhs investment will have grown into a whopping ₹1 crore. This exemplifies the profound impact of time in the world of investing.

It's important to acknowledge that the purchasing power of ₹1 crore after 15 years will not be the same as it is today due to inflation. To put it in perspective, if you had not invested and simply saved ₹36 lakhs, after adjusting for inflation, it would be equivalent to just ₹13 lakhs.

When considering inflation, the inflation-adjusted value of ₹1 crore will be worth ₹36 lakhs, which is still 2.5 times greater than leaving the money uninvested.

Furthermore, it's worth noting that there are numerous mutual funds that have historically yielded returns of 15% or more over the long term, making a 12% return expectation a conservative and practical choice for investors.