15 15 15 Rule explained: Financial goals can be achieved by investing money in mutual funds. If your target is to raise Rs 1 crore through this, then mutual fund investment formula can help you in achieving it. The name of this formula for raising big funds is Triple 15 i.e. 15-15-15. This formula can make investors who invest regularly a millionaire in a certain period of time. Let us know about this formula which is helpful in raising funds of Rs 1 crore.
What is the 15-15-15 formula of mutual fund investment?
In this formula for investing money in mutual funds, ’15’ appears three times. Hence its name is Triple 15 i.e. 15-15-15 formula. This formula for investing in mutual funds means that to reach the target of Rs 1 crore, how much does the investor have to save every month, for how long does he have to invest and what is the expected return on the investment amount. Understand the Triple 15 formula with an example here.
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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 at least 15% return by investing in mutual funds.
- Investment period of 15 years: Before investing in mutual funds, you should be ready 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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Know this also
By following this formula of mutual fund investment, a habit of saving is formed. In this, the 15-15-15 formula of investment emphasizes on two important aspects. Firstly, Systematic Investment Plan (SIP) is the method of investment and secondly, the benefit of compounding is available on the investment amount. 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.