Investing in mutual funds is considered as a smart way to grow your money as it offers a balanced approach for both beginners and seasoned investors. Mutual funds offer several key advantages to investors. Firstly, they provide instant diversification, as an investor's money is spread across numerous securities, reducing the overall risk exposure.
Secondly, they are managed by experienced professionals who have the expertise and resources to conduct thorough research, analyze market trends, and make informed investment decisions on behalf of the fund's shareholders.
Another notable benefit of mutual funds is their liquidity. Investors can easily buy or sell their fund shares at the current net asset value (NAV), which is determined at the end of each trading day. This liquidity allows for convenient entry and exit points, making mutual funds a flexible investment option.
Furthermore, mutual funds offer various investment objectives and strategies to cater to different investor goals and risk appetites. Some funds may focus on growth, income generation, or a combination of both, while others may specialise in specific sectors, industries, or geographical regions.
One of the best investment formulae is 15x15x15 Rule of Mutual Funds. If investors aim to earn Rs 1 crore in the near future, this rule can be a good attempt to achieve your goal.
What is 15-15-15 Rule?
The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation. This can be easily achieved if one is consistent in their SIP investment.
Investment for 15 years
Utilising the SIP calculator, an investment of Rs 15,000 monthly over a duration of 15 years results in a total capital outlay of Rs 27,00,000. Assuming an annual return of 15%, the projected long-term capital gains are estimated to be Rs 74,52,946. After 15 years, you will get a total of Rs 1,01,52,946.
Compounding in Mutual Funds
Compounding is a crucial aspect to understand when it comes to investing in Mutual Funds. This strategy involves investing a small amount of money regularly, which then grows over time into a larger sum through the power of compounding.
Essentially, compounding allows your initial investment to earn returns, which are then reinvested to generate even more returns in the future. By reinvesting earnings within the same investment timeframe, the compounding effect amplifies the value and profitability of your investment.
This concept forms the basis of many investment opportunities, making it essential to maximize gains by investing in mutual funds promptly and consistently. The idea of compounding highlights the importance of starting early and staying committed to long-term investment goals in order to see significant growth in wealth over time.
Equity funds: Large cap vs Mid cap vs Small cap
Many equity funds, encompassing short-, mid-, and small-cap categories, have achieved annual returns exceeding 15 per cent over the past decade. Consequently, sustaining a 15 per cent return annually for a duration of 15 consecutive years is a feasible outcome.
Investment plan
Investors may opt for a single mutual fund Systematic Investment Plan (SIP) or diversify across multiple SIP schemes to allocate their capital. Strategic investment planning is essential to attain the objective of amassing Rs 1 crore.
Diversification can be achieved by selecting various mutual fund SIPs from different categories such as equity, debt, and hybrid, which helps in mitigating risk associated with market volatility. It is recommended to consult with a professional fund manager to effectively navigate towards reaching the financial goal of Rs 1 crore.
Mutual funds in FY24
The assets under management (AUMs) for the domestic mutual funds industry increased nearly Rs 14 lakh crore to a record Rs 53.40 lakh crore as of March 2024 compared with Rs 39.42 lakh crore as of March 2023, AMFI's annual report stated. In FY2024, the equity-oriented mutual fund categories grew by 55% in fiscal 2024 to Rs 23.50 lakh crore.
FAQs
What is 15-15-15 Rule? The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation.
What is the 15 15 15 rule for 1 crore? ›
Rule 15*15*15 helps a mutual fund investor become a crorepati even with a monthly investment of Rs 15,000 for a tenure of 15 years. This rule says that a mutual fund investor will earn 15% return if the investment is made for a longer period.
How much should I invest in mutual funds to make 1 crore? ›
To reach this corpus, let us assume that the expected rate of return on your returns is 6.5%. Then using the Groww SIP calculator, you would be required to do a monthly SIP of Rs. 809000 approximately, every month to reach 1 Crore in a year.
How to build a corpus of 1 crore in 15 years? ›
15-15-15 rule to make Rs 1 crore from mutual funds
Assuming an equity fund offers a 15% annual return, you would need to invest Rs 15,000 per month via SIP for 15 years to achieve your goal of reaching Rs 1 crore.
What is 15 15 15 investment policy? ›
What is the 15x15x15 rule in mutual funds? The mutual fund 15x15x15 rule simply put means invest INR 15000 every month for 15 years in a stock that can offer an interest rate of 15% on an annual basis, then your investment will amount to INR 1,00,26,601/- after 15 years.
What is the 15x15x15 rule in SIP? ›
It says that if you invest Rs. 15,000 per month via SIP in an equity mutual fund that is capable of generating an average return of 15%, you are most likely to become a crorepati in 15 years (as stated in the example above). Your total investment in fifteen years = Rs. 15,000 x 180 months = Rs. 27,00,000.
What is the rule of 15-15-15? ›
What is 15-15-15 Rule? The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation.
How much SIP for 1 crore in 20 years? ›
How to accumulate Rs 1 crore in 20 years. If you want to get Rs 1 crore in 20 years, your SIP investment per month will be Rs 10,009. The total investment will be Rs 24.02 lakh, while you will get capital gains of Rs 75.98 lakh on it.
How to make 1 crore in 5 years through SIP? ›
Thus, a combined monthly contribution of Rs 1.30 lakh would create a corpus of over Rs 1 crore in 5 years. Kukreja says an investor can split their equity SIP contributions equally between large-, multi asset, and flexi cap funds.
How much should I invest in SIP to get 10 crore in 10 years? ›
How to accumulate a Rs 10 crore corpus in 10 years? Assuming an expected return rate of 12 per cent per year, an investor would need to invest Rs 4.34 lakh per month in equity funds through SIP to create a corpus of over Rs 10 crore in 10 years.
Given that performance, if one would started investing Rs 20,000 monthly through SIP in this fund 10 years ago, they would have got Rs 1.01 crore with capital gains of Rs 77.18 lakh. The expense ratio of the scheme is 0.77 per cent against the category average of 0.62 per cent.
How to make 2 cr in 10 years? ›
To start with, you can consider the Nifty 50 fund or an ELSS tax-saver from a reputed fund house. Consider gold only as a hedge and do not park more than 5-10% of your investment in it. Before you start investing, keep 3-6 months' expenses as an emergency fund to protect your long-term savings.
What is the value of 1 cr in 10 years? ›
Akshat Shrivastava on LinkedIn: The value of 1 Crore: (assume 7% inflation) - 10 years from now= 50Lakhs.… 109 comments.
What happens if I invest $15,000 a month in SIP for 15 years? ›
Consider investing Rs 15,000 per month for 15 years and earning 15% returns. After 15 years, the total wealth will be Rs 1,00,27,601 (Rs. 1 crore). According to the compounding principle, if we implement these very same returns and contributions for another 15 years, the amount we accumulate grows enormously.
What is 15 15 15 rule savings? ›
Meaning of the 15-15-15 rule in Mutual Funds
The Investment: You should invest Rs 15,000 per month. The Tenure: The total of your investment should be 15 years. It means that you will invest Rs 15,000 every month for the next 15 years. The Return: Your expected returns on your investment should be 15%
Which mutual fund gives a 15 percent return? ›
Two schemes from Bandhan Mutual Fund, HDFC Mutual Fund, JM Mutual Fund, Kotak Mutual Fund, and SBI Mutual Fund offered more than 15% in three, five, seven, and 10-year horizons.
What is the 1% of 1cr? ›
The 1% of 1 crore is one lakh (1,00,000) . The Percentage is a specified amount in every hundred. It is a number that can be expressed in the form of a fraction of a hundred.
How many million is 1 crore? ›
One crore is equal to 10 million.
What is the 15 return on investment? ›
Meaning of the 15-15-15 rule in Mutual Funds
The Investment: You should invest Rs 15,000 per month. The Tenure: The total of your investment should be 15 years. It means that you will invest Rs 15,000 every month for the next 15 years. The Return: Your expected returns on your investment should be 15%
Are mutual funds good investments? ›
All investments carry some risk, but mutual funds are typically considered a safer investment than purchasing individual stocks. Since they hold many company stocks within one investment, they offer more diversification than owning one or two individual stocks.
