Investing in mutual funds through a Systematic Investment Plan (SIP) is one of the smartest ways to build long-term wealth. A simple and popular method for planning your SIP is the 15x15x15 Rule, which can help you aim for a corpus of ₹2 crore over 15 years.
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What Is the 15x15x15 Rule?
The 15x15x15 rule is a formula based on three key numbers:
- ₹15,000
per month: The fixed amount you invest every month via SIP.
- 15%
annual return: The expected average annual return from your mutual
fund.
- 15
years: The investment period.
- 15% Step-up: Increase your SIP investment by 15% annually
If you follow this plan consistently, your total investment
of ₹27 lakh (₹15,000 x 12 months x 15 years) could potentially grow to
approximately ₹1.02 crore.
If an investor increases one's monthly SIP by 15 per cent annually, then 15 x 15 x 15 rule of mutual funds will enable the investor to create ₹2.21 crore, almost double of the maturity amount using flat 15 x 15 x 15 rule of mutual funds.
Let’s say you start investing ₹15,000 every month into a mutual fund that gives an average return of 15% annually. Here’s what the outcome might look like:
- Total
investment: ₹27,00,000
- Expected
return: ₹1,02,00,000 (approx.)
- Annual Step-up: 15%
- Total Invested: ₹85.64,000
- Final
value after 15 years: ₹2,21,00,000 (approx.)
This calculation assumes compounding returns and consistent
investment, without any withdrawals.
Key Points to Remember
- Discipline
is key: SIP works best when you stay invested without interruption.
- Start
early: The earlier you begin, the more time your money has to grow.
- Review
periodically: Track your fund performance and switch if necessary.
Why It Works
- Simple
to follow: No complicated financial jargon.
- Goal-driven:
Helps you stay focused on a long-term financial goal.
- Power
of compounding: Your returns also start generating returns, creating
exponential growth over time.
Need Help Getting Started?
If you're ready to start investing or want a more detailed
understanding of how the 15x15x15 rule can work for your specific financial
goals, feel free to contact us. We're here to guide you every step of
the way!
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Disclaimer:
Mutual fund investments are subject to market risks.
Please read all scheme-related documents carefully before investing. Past
performance is not indicative of future results.
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