Rule of 72 – An
Eye Opener - A Must Know for All Investors
Its an interesting mathematical
fact that if you divide 72 by the expected ROI, you get the number of years in
which your money will double, Isn’t it interesting and an eye opener ??
For FD, where Effective ROI,
after Tax is aprox 6%, it takes 12 years to double your money.
For an Equity fund, where
expected ROI (very conservative) is aprox 10%, it takes 7.2 years to double
your money.
For a Tax Saver fund, where the
Return is 15% in last 10 years or so, the money doubles in 4.8 years.
Following is the table showing
the Expected Rate of Return and No of years in which the investment will double
:
A study of many Mutual funds show
that in long term – due to multiple factors like Power of Compounding, Cost of
Averaging – SIP Investments fetch as high as 25-30% Annualised Returns. This is
an eye opener even for a most conservative investor and we recommend that
everyone should have exposure to Equity Mutual funds – Be it Balanced funds,
Tax Saver Funds etc.
For any queries and comments,
Please get in touch with us @ +91 98105 08321 or write to us @ info@sipindiasip.com – Your Private
Wealth Managers based in Noida-Delhi.
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