How the 15-15-15 Rule can help you build Rs 1 crore through mutual funds:If your goal is to accumulate Rs 1 crore through mutual fund investments, then a formula can help you achieve this goal in the long run. The formula for raising big funds through mutual funds is 15-15-15 which can make investors millionaires in a given time. Actually, this formula for investing in mutual funds helps in understanding how much you have to save every month, what should be the investment period, and what should be the expected rate of return to achieve the target of Rs 1 crore.
Investors indirectly invest money in the stock market through mutual funds. Stock markets are inherently volatile, with historical trends showing they generally rise in the long run. Although it may be challenging to achieve a stable return of 15 per cent every year in the stock market, it is possible to achieve an average annual return of around 15 per cent in the long run.
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What is the 15-15-15 formula for investing in mutual funds?
In this formula for investing money in mutual funds, ’15’ appears three times, which means the amount, time and interest rate to be invested every month. Suppose if a person invests Rs 15,000 every month for 15 years and gets an average annual return of 15 percent on the deposit, then he can become a millionaire after 15 years.
The 15-15-15 rule for investing in mutual funds is a general rule that helps investors make their investments safe and profitable. This rule is based on three main things.
- Expectation of 15% return: You should expect to get a return of at least 15% by investing in mutual funds.
- 15 year investment period: Before investing in mutual funds, you should be prepared for an investment period of at least 15 years. This period helps you avoid market fluctuations.
- Monthly Savings of 15%:To invest in mutual funds, you should invest at least 15% of your income as monthly savings.
This rule helps investors adopt a stable and long-term investment strategy to meet their financial goals. However, it is important to note that this rule is general and may change depending on individual financial circumstances and risk tolerance. Therefore, it is always advisable to consult your financial advisor before investing.
In fact, if someone invests Rs 15,000 every month in a mutual fund for 15 years and is getting an average return of 15 per cent per annum on his deposits, then he can achieve the target of Rs 1 crore.
Estimated Fund:1 crore rupees
Total investment in 15 years:27 lakh rupees
total profit:73 lakh rupees
This rule provides a basic framework for starting long-term savings. If you expect to get an average annual return of 12 per cent on long-term investments, then you can use Step-up SIP to raise a larger fund. Before embarking on an investment journey, it is advisable to calculate the savings requirements as per inflation for your particular goals.
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How is the 15-15-15 formula beneficial?
This 15-15-15 rule for investing in mutual funds emphasizes two important aspects: the Systematic Investment Plan (SIP) method of investing and the benefit of compounding on the investor. By following this formula of mutual fund investment, a habit of saving is formed. It also reduces the impact of market volatility, as units are purchased through SIP. This approach eliminates the temptation to time the market, making it possible to make additional investments in the same SIP folio during significant market declines.
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