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What is the 15X15X15 rule for becoming a crorepati through a mutual fund SIP?


‘Money attracts money’ is one of the common sayings when investing in mutual funds. Everyone wants to earn huge amount of money, if possible, even become a scammer in India. Microfinance institutions have the ability to turn an investor into a fraud. But like all other market-related instruments, MFIs are also subject to risk and have ups and downs. However, the real trick is when returns are fetched on a long term basis. In this case, the 15X15X15 rule is the best method to build the archive around 1 crore.

In a word, the 15X15X15 rule revolves around three factors – investment value, shelf life and expected return. And to implement this rule, the Systematic Investment Plan (SIP) is considered the best mechanism.

On its website, Nippon India Mutual fund Detailed explanation of the 15X15X15 rule. It said, compound interest, for mutual fund investments, refers to a phenomenon that causes a small amount of money to grow into a substantial amount when invested over a long period of time. In other words, the profit you make in one compounding period will in turn earn the profit in the next compounding period, etc.

Nippon MF explains with an example: Suppose you invest in 15,000 per month in mutual fund for 15 years and expect to generate 15% rate of return.

According to compound interest calculation, Nippon MF emphasizes that the amount you will get after 15 years will be ~ 1 crore. The same principle of pooling, when applied over the next 15 years, will exponentially increase the total number of documents ~ 10 crore.

The 15X15X15 rule is one of the most popular methods for investing in MFIs through SIP.

How? Your 15,000 monthly investments means total 270,000 were injected into MFs in 180 months. Estimated return on your investment will be approx 74 lakh — will take your archives through 1.01 crore.

Nippon says that the sooner you start investing in this way, the more wealth you can accumulate over time.

According to Dr. Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital, Diwali is a good time to think about your family’s current and future wealth.

“You should consider that you need almost 500-600 times your current monthly expenses in retirement to live the same lifestyle without the risk of running out of money in old age,” says Gupta. more than 15-20 years into retirement.Also, consider the 15-15-15 rule that 15,000 monthly investments for 15 years in an asset class — usually equity — generate 15. % per year can generate a fortune 1 crore. “

Furthermore, Gupta added that “While this is not investment advice that one should take from their financial advisor, someone around 45 years old, with a monthly cost of Rs. 1 lakh, ideally it is advisable to invest an extra Rs. 10,000 monthly equity in their remaining working life to build their retirement fund around 4 to 6 crores If the actual return is lower then it is possible to lose a few years from now but it’s still likely to stay low. Adding the total could get there faster.”

As the stock markets are facing strong volatility this year due to macroeconomic risks, the appetite for SIP has taken a significant leap. In September, SIPs inflow stood at 12,976 crore — only a few crore to cross 13,000 points. SIP inflow is already above 12,000 crore as of May this year. During the first six months of FY23, the cash flow to SIPs was approximately 74,234 crore – up 31.5% from 56,454 crore was recorded during the same period (April to September) of the previous fiscal. In Fiscal Year 22, cash inflows into SIPs stood at a record level 1.24,566 crore.

According to AMFI, Indian Mutual Funds currently have around 5.84 crore (58.4 million) SIP accounts through which investors regularly invest in Indian Mutual Fund schemes.

AMFI states that SIP is an investment plan (methodology) offered by Mutual Funds in which a person can invest a fixed amount in a Mutual Fund Program periodically at regular intervals. fixed time – say once a month instead of a one time investment. SIP installment amount can be as small as 500 per month. SIP is similar to a recurring deposit where you deposit a small/fixed amount monthly. SIP is a very convenient mutual fund investment method through permanent guidance to debit your bank account monthly without the hassle of having to write a check every time.

Furthermore, it says, SIP has gained popularity among Indian MF investors, as it helps in Rupee Cost Averaging and also in investing in a disciplined manner without worrying about the loss of money. market volatility and market timing.

Disclaimer: The views and recommendations given above are those of individual analysts or brokerage firms, not Mint.

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