Investors are scared by the continuous decline in the stock market. If you are a mutual fund investor aiming to accumulate a significant amount of money over time, there is no reason for concern. Keep investing. Compound interest in mutual funds is advantageous only over a prolonged period of time.
Having the ability to be patient and allow your investments to gradually grow in the beginning, then benefit from compounding in the following years, is crucial for success as an investor. Mutual funds utilize compounding to increase investors’ money gradually. Today we are sharing with you the 8-4-3 investment guideline. Every mutual fund investor must be aware of this rule. This will assist you in building a substantial fund, enabling you to invest wisely and achieve optimal returns.
Today we are sharing with you the 8-4-3 investment guideline
The investment rule demonstrates how compounding can help reach any financial objective. It is an idea that can aid in the expansion of your investments as time passes by. This is not a particular investment approach but instead a straightforward method to comprehend the possible speed of expansion. Consider a scenario where money increases based on this principle: if you regularly invest Rs 20,000 monthly in a mutual fund with an annual interest rate of 12%.
If it’s compound interest annually, you will have Rs 32 lakh after eight years. Rs 32 lakh is earned in 8 years initially, while the following Rs 32 lakh will be accumulated in only 4 years at the identical interest rate. After 12 years, investing Rs 20,000 monthly in a scheme will result in Rs 64 lakh.
Your investment has the potential to replicate this growth trend-
- Growth in the first eight years of your investments is consistent.
- Accelerated Expansion (Years 9-12): Your investment will experience comparable growth in the next four years as it did in the initial eight years.
- Exponential Growth (Years 13–15): Over the past three years, your investment has seen a growth rate that matches the previous four years.
Desclimer: For any financial investment anywhere on your own responsibility, Times Bull will not be responsible for it.