15% return expected
Stock markets are volatile in nature but in the long term they tend to move upwards as seen so far in history. It may not be possible to give a return of around 15 per cent every year in the equity market but an annual return of around 15 per cent can be achieved in the long term.
Rule of 15-15-15
The number ’15’ is used three times in the rule. These include growth rate, tenure and monthly amount of savings. Assuming that you will get 15 per cent annual return over 15 years (180 months), you need to save Rs 15,000 every month to arrive at a corpus of Rs 1 crore. That is, 15 years, Rs 15000 per month and annual return of 15% will make you a millionaire.
how much investment how much profit
In other words a target amount of Rs 1 crore can be achieved by investing Rs 15000 every month at an estimated annual growth rate of 15 years. You will get 15 years estimated amount Rs 1 crore. Your invested amount during this period will be only Rs.27 lakhs (in 15 years), while the profit amount will be Rs.73 lakhs. You will benefit more than two and a half times.
Step-up SIP
These rules are a way to give you a head start to start saving for the long term. You may not get 15% annual return. But if you are comfortable with an annualized return of 12 per cent, you can use a step-up SIP to build a bigger corpus. What happens in a step-up SIP is that you have to increase your monthly SIP amount annually by some amount at a fixed rate.
rule of sip
The 15-15-15 Rule of Mutual Funds takes two key things into account. First, you have to keep the SIP mode of investment. Second compounding which works for the benefit of the investor. 15-15-15 By following the mutual fund investment rule, you develop the habit of saving. This helps in keeping the volatility in check as the units are bought through SIP. There is no need to give time to the market. Instead, you can add more funds to the same SIP folio when the market sees a major downturn. This is an easy way. But since the stock market is involved, so does the risk.
fbq('track', 'PageView');
