RULE OF MUTUAL FUNDS FOR MONEY MULTIPLICATION

One of the most important rule in Mutual Funds is 15*15*15 Rule, the rule is as simplistic as it can get. It states simple terms that if one does a Systematic Investment Plan SIP of Rs 15000 per month in a mutual fund for 15 years which earns average 15% compounded annual returns, then You are able to accumulate in access of Rs 1 Crore.

So the basic calculation includes power of compounding and what magic it can create with such calculations. If you invest Rs 15,000 for 15 years at 15% compounding interest, then the exact amount you will receive at the end of 15 years is Rs 10152946. This calculation doesn’t include the inflation and irregularities. When inflation and other irregularities are considered at a rate of 4–5% on a average, the amount comes down to around Rs 75 Lakhs.

But the catch in this whole investment is the amount that you will invest. So, the total investment amount is only Rs 27 lakhs, Rs 15000 * 180(months)= Rs 27,00,000, You get a Profit of Rs 73,00,000.