ET Mutual Funds Explainer: Want to accumulate a corpus with monthly SIP of Rs 15,000? Use Rule 15*15*30

When an investor chooses a mutual fund, they often have a target return and an estimated corpus in mind. The Rule 15*15*30 offers a straightforward strategy for investors aiming to become crorepatis. By investing Rs 15,000 monthly for 30 years at an expected 15% annual return, investors can potentially achieve significant financial growth through the power of compounding. .

Compounding refers to the process of growing wealth by earning “interest on interest.” In practical terms, investors contribute a certain amount regularly, and the interest earned is added back to the principal, thereby generating more interest in the subsequent periods.

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According to the Rule 15*15*30, investing Rs 15,000 each month with a 15% return for 30 years can help in achieving long-term financial goals. The formula highlights the importance of consistent investment over an extended period.

When looking to calculate the target corpus using Rule 15*15*30, investors can use compounding calculators to estimate their potential returns. This strategy can provide a clear and tangible goal for those aiming for financial security and growth.

The Rule 15*15*30 encourages disciplined and regular investment, which can be crucial for achieving significant long-term financial goals. By allocating 15% of their income into a mutual fund for 30 years, investors can accumulate a substantial corpus.An investment of Rs 15,000 monthly over 15 years results in a total capital outlay of Rs 27,00,000. Assuming a 15% annual return, the projected long-term capital gains are estimated to be Rs 74,52,946. After 15 years, the total amount accumulated would be Rs 1,01,52,946.Also Read | Sensex at 80,000: Why mutual fund investors need to tone down expectations

It’s essential for investors to remain consistent and patient. The extended investment period and compounding returns can significantly amplify the initial investments, leading to substantial financial growth.

For investors looking to venture into mutual funds with the Rule 15*15*30, it’s advised to have a clear understanding of their risk profile and financial goals. Professionally managed mutual funds can offer a reliable avenue for long-term wealth creation, provided the investments are maintained consistently.

If you are looking to calculate the target corpus using Rule 15*15*30, here is how you can calculate.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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