15x15x15 Rule – Secret To Make 1 Crore
Everybody wants to become rich through investing, but have you ever searched for the correct strategy?
Nowadays, investing in various financial instruments linked with the stock market has become a trend. But unfortunately, very few people are aware of the right knowledge.
Aside from trading, if you believe in long-term investment, especially by investing in mutual funds, then let us share a magical trick first: 15x15x15 Rule!
What is that? – Just invest INR 15,000 every month for 15 years, assuming a 15% annual return. The power of compounding says that when you reinvest the return and keep contributing the same amount for such a long period then the accumulated amount grows unexpectedly. So if you want 1 crore after 15 years then the 15x15x15 Rule can be a solution for you depending on the corpus you invest.
Why Is The Power Of Compounding So Impactful?
Whenever it comes to investing in mutual funds, staying invested for a longer duration is preferred. The reason is nothing but you get to enjoy the power of compounding.
Compounding means when you earn profits on your profits, i.e., the gains are reinvested.
More specifically, it helps your money make more money. But for that, you have to reinvest your returns within a particular time frame; only that way will you understand the effects of compounding in your portfolio. Remember, compounding is always based on your basic principle.
For Example: According to the 15x15x15 Rule, if you start investing in an equity mutual fund that gives you an approximate return of 15% through SIP of Rs.15000 per month and you continue it for 15 years, then you can expect to become a crorepati. How?
Within these 15 years, your total investment will be Rs 27,00,000 and your approximate profit will be Rs 74,00,000.
Note: To accumulate more money over time, you should start investing earlier.
Major Benefits Of the 15x15x15 Rule
Investors can enjoy the benefits in two ways.
- Achieving The Long-Term Goals
When a person is investing 15% of their income in a mutual fund that gives 15% of annual return and continues it for a long 15 years, then using the accumulated large amount of corpus, that investor can fulfill bigger dreams. Let’s say you have an INR 50,000 income per month. If you decide to invest 15% of your monthly income, then you should invest Rs. 7,500 as an SIP in a mutual fund that gives you a 15% annual return and continue it for 15 years. At the end of the period, you are expected to receive approximately 57.65 lakh. Using this amount, you can fulfill many of your dreams. To do accurate calculations, investors may use SIP calculators before investing.
- Overcome Inflation Rate
Due to the high rate of inflation, people are losing their purchasing power. Savings are becoming valueless. But to beat inflation, this 15x15x15 Rule in mutual funds can help you a lot. For example, when the inflation rate is 6%, after 20 years, this Rs 1000 will be worth approximately 174 rupees. But when you start doing a mutual fund expecting to get a 15% annual return, your Rs 1000 will be worth approximately 16,366 rupees right after 20 years. So, understand the value of your money and start investing.
Take from the 15×15×15 Rule
When you are investing in mutual funds, remember these key points first:
- The 15×15×15 rule in mutual funds is simply focused on compounding. So, remember to invest your earnings in terms of generating more returns.
- As we already mentioned, to gain the advantage of compounding, investors need to stay invested for the long term.
- If you are investing through SIP, you don’t have to invest Rs.15000 per month. SIP can be started with only 500 rupees per month.
- Using the final amount you will receive after the period, you can expect to accomplish your long-term financial goals.
- Last but not least, this 15x15x15 Rule specifically refers to an investment of 15% of your monthly income for 15 years in a specific mutual fund that approximately provides 15% of your annual return.
Also, Check – 80-20 Rule for Investing in Mutual Funds
Wrapping Up
There are a lot of options you will get when it comes to investing in mutual funds, but 15×15×15 is the only solution that not only helps you become a crorepati or fulfill big financial goals but also works like a shield against inflation. As of now, we hope you have understood the process of the 15x15x15 Rule, but if you are still struggling with identifying the exact calculation you will receive after 15 years, then use the SIP calculators first. So go ahead, people—happy investing!
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Disclaimer – This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.
