The 15x15x15 rule in mutual funds is a simple rule of thumb that
suggests that you can invest in mutual funds to generate a corpus of Rs. 1 crore by
investing Rs.15,000 per month for 15 years at an annual return of 15%. It is a
powerful illustration of the magic of compounding.
Here is
a simple example of how the 15x15x15 rule works :
·
Investment amount: Rs. 15,000 per month
·
Investment period: 15 years
·
Annual return: 15%
Total investment : Rs. 15,000 x 12 months x 15 years = Rs. 27,00,000.
Corpus : Rs. 27,00,000 x (1 + 15/100)15 = Rs. 1,00,27,601.
This
can be calculated using the following steps :
a. Convert
the investment amount and annual return to decimals :
·
Investment amount = 27,00,000
·
Annual return = 15/100 = 0.15
b. Calculate
the compound interest :
·
Compound interest = Principal * (1 + Interest rate)^Number of
years
·
Compound interest = 2700000 * (1 + 0.15)^15
·
Compound interest = 1,00,27,601
Therefore,
the total amount after 15 years will be Rs. 1,00,27,601.
As you can see, even with a relatively modest investment amount, you can generate a substantial corpus over time by investing in mutual funds and taking advantage of the power of compounding.
It is
important to note that the 15x15x15 rule is just a simple rule of thumb. The
actual returns you generate will depend on a number of factors, including the
mutual fund scheme you choose, the market conditions, and your investment
horizon. However, the 15x15x15 rule is a good starting point for investors who
want to start planning for their financial future.
Here are
some tips for following the 15x15x15 rule :
·
Choose a mutual fund scheme that has a good track record and is
aligned with your investment goals.
·
Invest regularly and consistently. Even if you can only invest a
small amount each month, it will add up over time.
·
Stay invested for the long term. The longer you stay invested,
the more time your money has to grow.
·
Rebalance your portfolio regularly to ensure that it remains
aligned with your risk tolerance and investment goals.