SIP Investment rule: A fund of ₹1 crore can be created from a SIP of ₹15,000 every month. If this ₹1 crore stays invested for the next 15 years and gets 15% annual return, then it can become ₹10 crore. Let us see what is the formula by which you can convert your investment into crores.
Investment rules 15-15-15 Formula: Nowadays people are turning more towards mutual funds instead of fixed deposits (FD) or public provident funds (PPF). The reason for this is that mutual funds not only give better returns but also provide flexible investment and easy facilities like SIP. SIP means Systematic Investment Plan, in which you invest a small amount every month. As your salary increases, you can also increase the amount of SIP.
Now the question arises how much can you earn from this? So the answer is you can earn ₹ 1 crore, that too with just a simple formula – 15-15-15 rule. This formula tells how much money to invest, for how long to invest and how much return to get so that you can easily achieve the target of ₹ 1 crore.
How does the 15x15x15 rule work?
Suppose you do a SIP of ₹15,000 every month i.e. ₹1.8 lakhs in a year. By doing this for 15 years, you have invested a total of ₹27 lakhs. Now if you get a compound return of 15% every year, then after 15 years you can have around ₹1 crore. But the story does not end here. If you keep the same ₹1 crore invested for the next 15 years and keep getting a return of 15%, then the same money will become around ₹10 crores.
Compounding: Money makes money
‘Compounding’ means that the return you get on your investment, itself starts earning more returns. If you give it time, have patience and keep the SIP going, then compounding can grow your money tremendously. A SIP of ₹27 lakh to ₹1 crore and then the same ₹1 crore to ₹10 crore, this is possible only through the power of compounding.
What is the most important thing in investing?
- Starting early
- Investing consistently
- Patience and time
If you follow these three things, then mutual funds can help you reach crores.
By following the 15-15-15 rule, you can not only fulfill your dream of ₹1 crore, but can also reach ₹10 crore in the next 15 years, that too without any hassle, just by doing smart SIP.
If you are looking for a way in which you do not have to work hard, there is no risk of stocks and still you can become a millionaire, then mutual fund SIP and 15x15x15 rule are best for you.
A point to note
15% return is not a guarantee, but equity mutual funds have given such returns many times in the past years. So think long term, don’t be afraid of market fluctuations and continue with SIP.
