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A Comprehensive Guide to 15x15x15 Rule to Build a Corpus of Rs. 1 Crore​​​​​​

The rise and fall prevalent in the stock market have led many individuals to think of investing money in mutual funds. You might have read news about different types of funds delivering 10x or 20x returns over the long term, along with a caution that mutual fund investments are subject to market risk.

Wondering if there is a way out in between all this following which you can become a crorepati in India? It is possible when you dig deeper into the 15x15x15 rule in mutual funds. The best part - you need not invest a huge amount in accumulating a corpus of Rs. 1 crore. 

Let us help you understand what the 15x15x15 rule is so that you can make the most out of it. Before we get to the concept, you should also know about the power of compounding.

The Role Played by the Power of Compounding

Compounding, for mutual fund investments, refers to a phenomenon that makes small amounts grow to a significant corpus when invested over a long period. In other words, the returns you earn in one compounding period will, in turn, earn returns in the next compounding period and so on. Consider this example -

You choose to invest Rs. 15,000 per month in a mutual fund for 15 years that is expected to generate returns at the rate of 15%. As per compound interest calculations, the amount you will receive after 15 years will be ~Rs. 1 crore. The same compounding principle, when applied for another 15 years, increases the total corpus exponentially to ~Rs. 10 crore.

Hint: This example contains the essence of the 15x15x15 rule related to mutual fund investments. Let’s get to it.

More About the 15x15x15 Rule for Mutual Fund Investments

The 15x15x15 rule is one of the most basic rules for investing in mutual funds via the SIP route. It says that if you invest Rs. 15,000 per month via SIP in an equity mutual fund that is capable of generating an average return of 15%, you are most likely to become a crorepati in 15 years (as stated in the example above).

Your total investment in fifteen years = Rs. 15,000 x 180 months = Rs. 27,00,000

Approximate profit = Rs. 74,00,000

Lesson: The earlier you begin investing this way, the more wealth you can accumulate over time.

How to Benefit from the Magic of Compounding

A common saying about mutual fund investments goes like this - Money attracts money.

The same holds true when you follow the 15x15x15 rule to invest money in mutual funds. Backed by the power of compounding, your money can undergo a multiplier effect in which the initial capital generates returns, and then the accumulated return generates more return subsequently.

To benefit from the power of compounding, what matters the most is a long-term investment strategy. With SIP-based investments in mutual funds, you will also get an easy way to participate in the equity market.

Conclusion

When you invest in mutual funds, you choose to invest time along with your capital. It also symbolises the fact that time is money when invested in the right manner. With a long-term investment horizon, you can build a progressive portfolio and aim to become a crorepati with the help of the 15x15x15 rule.

FAQ

What is the 15-15-15 rule in mutual funds?

The rule says that an investor can create a corpus of around one crore rupees by investing Rs. 15,000 per month for 15 years in a mutual fund that can generate 15% average returns based on the power of compounding.

What is compounding?

Compounding, at its core, refers to the ability of an asset to generate returns that are then reinvested to enhance the value of initial investments further. It allows you to grow your wealth at a faster rate.

How can I become a crorepati in 15 years?

Depending on your current income and risk tolerance, you can simply follow the 15x15x15 rule to begin investing money in the right funds via SIP and let your investments grow to build a corpus worth Rs. 1 crore or more.

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Disclaimer:
Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under 'Intermediaries/ Market Infrastructure Institutions'. For redressal of your complaints, you may please visit www.scores.gov.in . For more info on KYC, change in various details & redressal of complaints, visit mf.nipponindiaim.com/investoreducation/what-to-know-when-investing This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document. Language Disclaimer:
While utmost care has been taken in translating the article into respective regional language(s), in case of any confusion or difference of opinion, article available in English language should be deemed as final. The article provided herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional advice for the readers. The document has been prepared on the basis of publicly available data/ information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of loss of profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this article. "ABOVE ILLUSTRATIONS ARE ONLY FOR UNDERSTANDING, IT IS NOT DIRECTLY OR INDIRECTLY RELATED TO THE PERFORMANCE OF ANY SCHEME OF NIMF. THE VIEWS EXPRESSED HEREIN CONSTITUTE ONLY THE OPINIONS AND DO NOT CONSTITUTE ANY GUIDELINES OR RECOMMENDATION ON ANY COURSE OF ACTION TO BE FOLLOWED BY THE READER. THIS INFORMATION IS MEANT FOR GENERAL READING PURPOSES ONLY AND IS NOT MEANT TO SERVE AS A PROFESSIONAL GUIDE FOR THE READERS."

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