15-15-15 rule: How can a ₹15,000 monthly SIP potentially grow to ₹1 crore? Check the complete calculations
Are you aiming to build a meaningful corpus for your future? Do you have a proper financial plan to accomplish the same objective? Are you aware of the silent power of compounding?
Having a clear understanding of these basic concepts is indispensable for ensuring meaningful wealth creation in the long run. Now, building a corpus of ₹1 crore through mutual fund investments may seem a challenging and daunting task; still, a disciplined approach, clarity of objectives and a long-term investment horizon can help investors work towards this goal.
The 15-15-15 rule of investing is a popular investment thumb rule that clearly explains how patience, consistency in investing, time, and compounding can work together to build wealth in the long run. This write-up is dedicated to discussing this rule in detail and how it can help create meaningful wealth if followed diligently.
This is an investment rule that suggests investing ₹15,000 every month through SIPs, i.e., a Systematic Investment Plan, targeting an assumed annual return of 15% over an extended period of 15 years. Furthermore, the returns under this rule are reinvested, allowing the investment corpus to benefit from compounding.
Still, it is vital to note that the 15-15-15 rule does not guarantee a ₹1 crore corpus in 15 years. This is because market returns are subject to risks and depend on a host of other factors. Secondly, at a 15% annualised return, which is a presumed return, the estimated corpus would be approximately ₹1 crore, depending on the calculation method, timing of investments and eventual compounding value.
Assuming a monthly SIP of ₹15,000 and an illustrative annual return of 15%, then the estimated investment outcome will be as follows:
|
Estimated amount |
|
|---|---|
| Monthly SIP | ₹15,000 |
| Investment period | 15 years |
| Total amount invested | ₹27,00,000 |
| Assumed annual return | 15% |
| Estimated corpus | ₹1,01,52,946 |
| Estimated wealth gained | ₹74,52,946 |
Source: SIP calculator available on Angel One's official website. The returns are indicative and can vary slightly depending on the calculation tool used.
These figures assume monthly investments and an annualised return of 15%. The returns under this investment are compounded monthly. The presumed returns here are instructive in nature. Further, the actual returns will vary with market performance and the timing of investments.
For investors, it is very important to acknowledge and understand that a 15% return is only an assumption. It is not an assured return. Equity markets, stocks or mutual funds are market-linked investment products, and their value can fluctuate immensely depending on aspects such as geopolitical conditions, oil and commodity prices, etc.
The key takeaways are as follows:
- Consistency in investments and a long-term horizon can assist in wealth creation.
- Investors should also ensure that they don’t rely on a single return assumption.
- These are projections only, as mutual fund returns are subject to market risks.
- Investments should be made based on an individual investor’s risk tolerance, investment horizon, and long-term objectives.
- The portfolio must be reviewed periodically to improve it.
- In case of doubts, professional guidance must be sought.
In summary, wealth creation is a long-term process that requires patience and adherence to investment principles. The 15-15-15 can be one such method of wealth creation. Any investments should be made only after proper due diligence, seeking professional guidance from a certified financial advisor and having a solid understanding of the basics.
Disclaimer: The calculations are illustrative estimates based on an assumed annual return of 15%. Actual returns may vary, as mutual fund investments are subject to market risks. Past performance does not guarantee future returns. This article is for general information only and should not be construed as investment advice. Consult a qualified financial adviser before investing.
Shivam Shukla
Shivam writes on personal finance, equity markets, and mutual funds. He has previously contributed to several leading publications, including Moneycontrol. He can be reached at shivam.shukla@htdigital.in
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HomeMoneyPersonal Finance15-15-15 rule: How can a ₹15,000 monthly SIP potentially grow to ₹1 crore? Check the complete calculations
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