SIP calculator: How to obtain 2 crores in 15 years using mutual funds’ 15 x 15 x 15 rule
Accumulating a corpus of Rs.1 crore is something most investors have on their checklist. However, building a corpus of that size requires time, expertise, and perseverance. The best way to go about such a mammoth task is to take the help of time-tested methods or tools. For instance, the 15x15x15 rule. It is a proven method of building a corpus worth Rs.1 crore in 15 years. But what if you want to make a fund that is double the size? Well, there is a way for that too. Read on to find out.
What is the 15x15x15 rule?
15x15x15 is a mathematical equation that can help build a corpus of Rs.1 crore in 15 years through investments. The rule says that if you invest Rs.15,000 every month in an investment vehicle that gives you 15% returns, you can accumulate Rs.1 crore in 15 years. The equation here works through the power of compounding. Compounding is the principle where the returns you earn from an investment are reinvested, and the returns also start earning money.
For example, if you invest Rs.10,000, and at the end of the first month, your return is Rs.500, you will start earning returns for Rs.10,500 and not Rs.10,000 alone. In the long term, compounding can do wonders for your investment.
How to use the 15x15x15 rule?
You can employ several investment vehicles to use the 15x15x15 rule practically and make a crore. Mutual funds are one of the favourite choices. Your job is to find a fund that could give you 15% returns per annum. Now, there is no hard and fast rule to finding such a mutual fund as their returns depend on several factors, including stock markets. Instead, the best game plan is to make research your friend. The research will give you a much better understanding of markets and what it holds for you in the future. This way, you could find a fund that works according to your calculations to earn that crore.
How to make Rs.2 crore in 15 years?
Inflation is playing a spoilsport for many investors as it decreases the purchasing power of their money. Considering that, Rs.1 crore need not be adequate in 15 years. But fret not; you can use the same equation to double your corpus, but with a bit of adjustment. You can set your goal amount to Rs.2 crore if you ramp up your monthly investments by 15% each year. That means if you are investing Rs.15,000 per month in the first year, you would need to increase that to Rs.17,250 the following year. If you keep increasing your investment amount by 15% each year like this, you can comfortably build a corpus worth Rs.2 crore in the same time frame.
You can use a systematic investment plan to invest like in the example above. With SIP, you can invest a set amount of money each month to build a respectable corpus slowly. You can plan and build a corpus of any amount here. An SIP calculator helps in that respect.
In the above scenario, we know that investing Rs.15,000 per month for 15 years can help you accumulate Rs.1 crore because it is proven mathematically. Here, you can use an SIP calculator to set your own custom goals and see what time frame and monthly instalments are necessary to achieve the same.
The 15x15x15 rule is a proven method of corpus building. But many investment methods, including mutual funds, are market-linked, and all calculations are based on assumptions. Hence, make sure you do your research to find an investment vehicle that suits your goals before you employ the 15x15x15 rule.