Mutual fund calculator: ₹10,000 monthly SIP can make you a crorepati. Here's how | Mint
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Business News/ Money / Personal Finance/  Mutual fund calculator: 10,000 monthly SIP can make you a crorepati. Here's how
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Mutual fund calculator: ₹10,000 monthly SIP can make you a crorepati. Here's how

SIP calculator: 15 x 15 x 15 rule of mutual funds say that an investor can accumulate ₹1 crore by investing ₹15,000 per month for 15 years

SIP calculator: Mutual fund investors can maintian 10% annual step up in one's monthly SIP to reap the benefit of compounding benefit (MINT)Premium
SIP calculator: Mutual fund investors can maintian 10% annual step up in one's monthly SIP to reap the benefit of compounding benefit (MINT)

Mutual fund calculator: Well know author Shiv Khera has written in his book 'You Can Win' that 'winners don't do different things but they do things differently. This quote holds well for equity mutual fund investors as well. With a simple pun in normal investment strategy an investor can become a crorepati in 15 years saving 10,000 per month in mutual funds SIP (Systematic Investment Plan).

15 x 15 x 15 rule of mutual funds

Speaking on how to become a crorepati at fastest rate through mutual fund investments, Pankaj Mathpal, Founder & CEO at Optima Money Managers said, "15 x 15 x 15 rule of mutual funds say that an investor can accumulate 1 crore by investing 15,000 per month for 15 years." He said that the rule says that an equity mutual fund investor can expect to get at least 15 per cent return on one's money if its time horizon is 15 years or more.

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However, this can be made pssible by investing 10,000 per month as well. what one need is to make some adaptation in one's investment strategy.

SIP step up strategy

On how to accumulate 1 crore by investing 10,000 per month in equity mutual funds, Kartik Jhaveri, Director — Wealth Management at Transcends Capital said, "Normally, it has been found that people invest in mutual funds using monthly SIP. But, they continue investing same monthly amount even when their time horizon is long. My suggestion to such mutual fund investors is to maintain annual SIP or maintain step up in monthly SIP in sync with increase in one's income. For more simple strategy, one can maintain annual step up in monthly SIP."

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On annual step up that one can maintain while investing in equity mutual funds in monthly SIP mode, Kartik Jhaveri of Transcends Capital said, "In general, one can maintian 10 per cent annual step up in one's monthly SIP to reap the benefit of compounding benefit."

Highlighting the benefit of SIP step up, Pankaj Mathpal of Optima Money Managers said, "A long term investor enjoys interest on interest, which we call compounding benefit. However, if an investor follows annual step up, this compounding benefit gets maximized."

SIP calculator

So, assuming an investor invests 10,000 per month for 15 years, maintaining 10 per cent annual step up, mutual funds SIP calculator suggests that one's SIP of 10,000 would yield 1,03,11,841 or 1.03 crore. In this assumption, annual SIP yield has been assumed 15 per cent per annum following 15 x 15 x 15 rule of mutual funds.

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See SIP step up calculation below:

Photo: Courtesy Groww SIP step up calculator
View Full Image
Photo: Courtesy Groww SIP step up calculator

In this 10,000 monthly SIP for 15 years along with 10 per cent annual step up, one would be investing 38,12,698 whereas its interest would come around 64,99,143.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 30 Sep 2023, 11:22 AM IST
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