Investment Tips: What is the 8-4-3 investment formula, which will make you rich, know here!

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Earning a lot of money is not an easy task. Even if you save in a bank, you deposit a certain limited amount. Have you ever wondered how long it takes to become a millionaire? Of course, this will depend on how much you invest every month. Not only this but how much return is received on that investment. It also depends on how much this amount increases. But it will take time to deposit one crore rupees but it is not a difficult thing. Financial discipline and the power of compounding over the long term will make you a millionaire. Your savings will double or triple in a few years.

How compounding makes you rich

You do not get interest beyond a certain limit on bank savings, recurring deposit schemes, or fixed deposit schemes. Here it takes more time to double your original amount. Also, compound interest does not seem to provide any significant benefit. This is the miracle of compounding. The interest amount is added to your principal amount and it again earns interest. That means you get interest on interest. Get higher returns on your principal amount.

Although this is the 8-4-3 rule

If you want to deposit Rs 1 crore in a short time, then you must know the 8-4-3 rule of compounding. Let us understand this with an example. If you invest Rs 21,250 per month through SIP in mutual funds. 12% interest was available per month on this. With compound interest compounded annually, Rs 33.37 lakh will accumulate in your mutual fund account in just eight years.

Rule of compounding

You have made this 8-year investment. Now it will take only 4 years instead of 8 years to raise the next Rs 33 lakh. It will take only 3 years to raise the next Rs 33.33 lakh. That means a total of Rs 1 crore will be deposited in 15 years. Now you might be thinking that the salary here is less. How much will you save there? So sit and see your savings of two thousand, three thousand, four thousand in this formula. No one can stop you from becoming a millionaire.