Investing in mutual funds can always carry risks, as it involves indirect exposure to the stock market. Every investor seeks a secure, safe market with higher returns but the stock market’s volatility has made investors more cautious about where they put their money.
For investors aiming to accumulate Rs 1 crore, the 15x15x15 rule can be followed. It is believed that by investing just Rs 15,000 per month for at least 15 years, one could reach this target. This rule works on the power of compounding.
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Compounding refers to the phenomenon where a small amount invested regularly grows into a substantial sum over time. It is a crucial concept in mutual funds and personal finances, forming their backbone. The interest earned in one year will earn further interest in the subsequent compounding periods.
For example, if you invest Rs 15,000 per month for 15 years at an annual rate of 15%, the accumulated amount after 15 years will be approximately Rs 1 crore. This means you invested only Rs 27 lakh and earned Rs 73 lakh.
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If you extend the investment for another 15 years, following the 15x15x30 rule, your corpus will grow exponentially to around Rs 10 crore. Thus, you will have invested around Rs 27 lakh and earned Rs 9.8 crore.
According to Vinit Khandare, CEO and founder of My Fund Bazaar India Pvt. Ltd., these are a few equity share schemes that may help you achieve your first Rs 1 crore with the 15x15x15 rule:
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1. Small-cap Fund: SBI Small Capital Fund – Regular Growth
2. Mid-cap fund: Aditya Birla Sun Life Mid-Fund Plan
3. Large-cap fund: HDFC Top 100 Fund – Regular Plan Growth
The choice of investments depends on your current income source and risk tolerance, as mutual funds are subject to market risk. With SIPs in mutual funds, you can easily participate in the equity market.
