SIP 7-5-3-1 RULE
WHAT'S THE RULE ?
7-5-3-1 rule helps you decide:
How to invest your SIP, Where to invest and for How Long to invest.
IT HAS 4 EASY PARTS: .
•7 Years of Patience
•5-Finger Rule
•3 Mental Tricks
•1 Step-up Every Year
*7 YEARS OF PATIENCE*
You need to wait at least 7 years before you take out the money.
Last 25 years data suggest if you stay invested for atleast 7 years in equity funds, you have ZERO % chance of losing money
*5-FINGER RULE*
Use your 5 fingers to remember that you should invest your money in different things like Large-cap, Mid-cap, Small cap, Flexi-cap, etc, so that it grows safely.
*3 MENTAL TRICKS*
The third principle of the rule is to be prepared for three phases of investing:
• Disappointment Phase (7-10% returns): Manage expectations; moderate gains are still positive.
•Irritation Phase (0-7% returns): Accept market fluctuations; focus on long-term growth.
• Panic Phase (Negative returns): Stay calm; markets recover over time, avoid panic_ selling
*1 STEP-UP EVERY YEAR*
Every year, you can increase the amount of SIP by certain amount or percent. Let's say you have a ₹10,000 SIP, and you do a top-up of 1000 per year. Next year SIP becomes 11,000 and so on. This small change will add wings to your final amount. Check out yourself...
*SIMPLE MATH*
10,000 SIP at 15% will give1.51 crore after 20 years BUT same 10,000 SIP with a 10% Annual Step-Up will give 2.78 crore
WHAT'S THE RULE ?
7-5-3-1 rule helps you decide:
How to invest your SIP, Where to invest and for How Long to invest.
IT HAS 4 EASY PARTS: .
•7 Years of Patience
•5-Finger Rule
•3 Mental Tricks
•1 Step-up Every Year
*7 YEARS OF PATIENCE*
You need to wait at least 7 years before you take out the money.
Last 25 years data suggest if you stay invested for atleast 7 years in equity funds, you have ZERO % chance of losing money
*5-FINGER RULE*
Use your 5 fingers to remember that you should invest your money in different things like Large-cap, Mid-cap, Small cap, Flexi-cap, etc, so that it grows safely.
*3 MENTAL TRICKS*
The third principle of the rule is to be prepared for three phases of investing:
• Disappointment Phase (7-10% returns): Manage expectations; moderate gains are still positive.
•Irritation Phase (0-7% returns): Accept market fluctuations; focus on long-term growth.
• Panic Phase (Negative returns): Stay calm; markets recover over time, avoid panic_ selling
*1 STEP-UP EVERY YEAR*
Every year, you can increase the amount of SIP by certain amount or percent. Let's say you have a ₹10,000 SIP, and you do a top-up of 1000 per year. Next year SIP becomes 11,000 and so on. This small change will add wings to your final amount. Check out yourself...
*SIMPLE MATH*
10,000 SIP at 15% will give1.51 crore after 20 years BUT same 10,000 SIP with a 10% Annual Step-Up will give 2.78 crore
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