How to accumulate ₹50 crore in 30 years — explained

Mutual funds: SIP calculator suggests that one can achieve 50 crore investment goal in 30 years, using 15% annual step-up

Asit Manohar
Updated31 Mar 2023, 06:17 AM IST
SIP calculator: In 15 x 15 x 15 rule of mutual funds, one can expect to get at least 15 per cent return on one's money invested for 30 years.
SIP calculator: In 15 x 15 x 15 rule of mutual funds, one can expect to get at least 15 per cent return on one’s money invested for 30 years.(HT_PRINT)

Mutual fund calculator: Mutual fund investments are subject to market risk but for a monthly SIP (systematic investment plan) investor, risk becomes lowest as one gets average of the equity return given during the period of investment. So, for a long term investor, mutual fund SIP is an ideal investment tool that one can start at any time and need not to bother about the bull or bear trend on Dalal Street.

As per the tax and investment experts, a long term mutual fund investor must know 15 x 15 x 15 rule of mutual funds where an investor can expect to get 15 per cent return on one's SIP after investing for 15 years. However, they advised an investor to raise one's monthly SIP amount with increase in one's annual income using annual step-up strategy. It helps them keep monthly SIP amount at lowest possible level. They said that if a person is starting a monthly SIP at the age of 30, one can accumulate 50 crore at the time of retirement, provided the annual step-up in monthly SIP is maintained in a disciplined manner.

15 x 15 x 15 rule of mutual funds

On how much return one can expect on a monthly SIP for 30 years, Kartik Jhaveri, Director — Wealth at Transcend Capital said, "As per the 15 x 15 x 15 rule of mutual funds, one's mutual fund SIP would yield around 15 per cent if the period of investment is 15 years. In case of 30 years time horizon, one can expect to get 15 per cent return on one's money."

On how to accumulate 50 crore from mutual fund investments using SIP mode, SEBI registered tax and investment expert Jitendra Solanki said, "To achieve 50 crore investment goal, one needs to start a monthly mutual fund SIP from the nascent phase of one's carrier. However, if someone starts at 30 years of age, then he or she still has 30 years for investing and they must have reached a level in their career when they can start a monthly mutual fund SIP with some ambitious figures."

However, Solanki advised mutual fund investors to use annual step-up to keep the initial monthly saving at lowest possible levels.

On how much annual step-up is advisable, Kartik Jhaveri said, "In normal case, we advise 10 per cent annual step-up. But, to achieve 50 crore investment goal in last 30 years of one's career, i would advise the investor to maintain 15 per cent annual step-up to ensure highest possible probability to achieve this ambitious investment goal as in 30 years of investment period, mutual funds would give at least 15 per cent. One may end up with 16 or may be 18 per cent annual yield on one's investment."

How to become crorepati: SIP calculator answers

As per the mutual fund return calculator, assuming 15 per cent return on one's money invested for 30 years using 15 per cent annual step-up for the entire period, an investor would require 21,000 per to start a monthly SIP. In other words, a mutual fund investor can expect to achieve 50 crore investment goal in 30 years by starting a mutual fund SIP in monthly mode through 21,000 monthly savings.

See SIP calculator below:

Photo: Courtesy groww

On equity mutual funds that may give such robust 15 per cent return in long term, Pankaj Mathpal, MD & CEO at Optima Money Managers listed out the following three mutual fund schemes:

1] ICICI Prudential Flexi Cap Fund;

2] Canara Robeco Emerging Equities Fund; and

3] Quant Active Fund.

Disclaimer: The views and recommendations made above are those of individual analysts or personal finance companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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First Published:31 Mar 2023, 06:17 AM IST
HomeMoneyPersonal FinanceHow to accumulate ₹50 crore in 30 years — explained

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