Mutual fund calculator: Your ₹500 per day savings can make you a crorepati in 15 years
So, if your goal as an investor is to accumulate ₹1 crore, there is a simple and effective strategy that you can follow- the 15x15x15 rule
Mutual fund calculator: Investing in mutual funds via Systematic Investment Plan (SIP) route. It's a well-known fact that in the long term, mutual fund SIP helps an investor get compounding benefits. So, the majority of mutual fund SIP investors go for long-term investments. So, if your goal as an investor is to accumulate ₹1 crore, there is a simple and effective strategy that you can follow- the 15x15x15 rule.
What is the 15x15x15 rule of mutual funds?
The 15x15x15 rule of mutual funds involves investing ₹15,000 per month for a period of 15 years in a fund that offers a 15% annual return.
Well, it simply says that if one does a 15,000 rupees SIP per month for 15 years which earns an average 15% compounded annual returns, You are able to accumulate ₹1 crore (against your total investment of only 27 lakhs ), said tax and investment expert Balwant Jain.
What is compounding?
Compounding refers to the process of earning interest on your interest, leading to exponential growth in your investments over time.
“By investing just ₹15,000 per month for 15 years in a stock that offers a 15% annual return, you can amass a corpus of ₹1,00,27,601. In other words, you would have invested only ₹27 lakh and earned a profit of ₹73 lakh,” said Amit Gupta, MD, SAG Infotech.
15 X 15 X 30 rule of mutual funds
Furthermore, if you continue this investment strategy for another 15 years, your corpus will grow exponentially.
The 15 X 15 X 30 rule of mutual funds? If u do a 15,000 Rs.SIP per month for 30 years (instead of 15 years as earlier), at a 15% compounded annual return, You will be able to accumulate 10 CRORE against 1 crore if u invest for 15 years), said Balwant Jain.
This shows that time, and not timing is important for Wealth Creation, added Jain.
Meanwhile, capital markets regulator Sebi is looking at introducing a performance-linked incentive for mutual funds and will soon be coming out with a consultative paper on the same, news agency PTI reported.
"… we are trying to focus. Shortly, you will see once we come out with a consultative paper where we will try to link performance and try to see surrounding that performance what incentive structure we can create," Kumar said while speaking at an MF summit organised by industry lobby CII.
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First Published:6 May 2023, 09:40 AM IST
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