Last Updated: October 26, 2022, 12:11 IST
Now let’s examine the 15*15*15 rule of the market.
If someone invests Rs 15,000 for 15 years in a mutual fund scheme or stock that yields a 15 per cent annual return, they can accumulate Rs 1 crore.
Who doesn’t want to be a millionaire? But did you know that becoming one doesn’t require you to commit a sizable sum of money all at once? You can get the same and frequently even higher returns by investing small amounts over a longer period of time.
Mutual funds provide a number of options suitable for clients with varying investment horizons and risk appetites. Mutual funds have recently emerged as the preferred choice for investors. Additionally, it is quite simple to invest in and does not call for huge lump-sum investments. The availability of SIP in nearly all mutual fund schemes has made investing a simple and painless procedure.
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Now let’s examine the 15*15*15 rule of the market. If you are an investor, abiding by this straightforward rule will enable you to build up to Rs. 1 crore over time. According to the regulation, if someone invests Rs 15,000 for 15 years in a mutual fund scheme or stock that yields a 15 percent annual return, they can accumulate Rs.1 crore. It is primarily because of compounding’s strength.
However, it may not be viable to create 15 percent income annually given the volatility of stock markets. But 15 percent annualised returns are definitely feasible over the long run. Additionally, according to stock market history, markets always rebound over the long run, even following a severe meltdown.
In addition to averaging total returns in the event of a crash or market instability, the power of compounding in SIP payments also offers higher returns than lump sum investments.
Compounding generally refers to the growth of your investment on interest that has already been received and accumulated. The amount of your original principal is increased each time you earn interest on it. You will therefore receive interest on the higher principal amount the next time. This enables your interest to significantly increase over time. The total amount you receive after investing is Rs 15,000 at a 15 percent annual interest rate for 15 years is therefore Rs 1 crore.
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