Systematic Investment Plan
In today’s time, big income is no longer necessary to become a millionaire. With the right strategy and discipline, even small savings can turn into a big fund. The 15-15-15 SIP formula is based on this thinking, which shows investors a possible path to reach Rs 1 crore in the long run.
The 15-15-15 SIP rule is becoming increasingly popular among those investing in mutual funds. It is a simple yet effective formula, which helps investors understand how regular investments and the power of time can build a huge corpus.
What is the meaning of the formula?
There are three main bases of this rule. Investment of Rs 15,000 every month, tenure of 15 years and average annual return of 15%. According to this calculation, if an investor does SIP continuously for 15 years without any break, he can create a corpus of around Rs 1 crore. This is the reason why this formula remains the center of attraction especially among new investors.
However, it would not be right to accept this formula as completely true. The most important thing to understand is that the returns of equity mutual funds depend on the market, which is not always stable. The 15% return is an estimate, not a guarantee. Sometimes due to market fluctuations the actual return may be more or less than this. If you get 15 percent return for 15 years, then you will invest a total of Rs 27 lakh at the rate of Rs 15 thousand, on which you will get a return of approximately Rs 75 lakh under compounding. In this way, if both are combined then the total fund will easily be more than Rs 1 crore.
Keep these things in mind
The success of this strategy completely depends on discipline and patience. First of all, the earlier you start investing, the better. The effect of compounding increases with time and the investment grows faster.
Another important aspect is consistency. Interrupting or irregular SIP can affect your goal. At the same time, continuing to invest during a downturn in the market can prove beneficial, because at this time more units are available at lower prices.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
