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Heard about this SIP retirement formula? Know how soon Rs 15,000/investment can grow to over Rs 1 crore
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
15x15x15 Formula: Are you planning for your retirement and looking for an investment option that can help accumulate wealth in the long term? If so, then you can consider mutual funds. They are an asset class that invests money in various assets like stocks, equities and bonds on behalf of investors. There are two types of investments in mutual funds: one-time investment/lump sum investment and monthly investment.
SIP is an investment strategy that allows investors to invest money based on their financial capacity in mutual funds. It offers investment flexibility, allowing investors to pause, withdraw, or increase their SIP contributions.
In SIP, there are certain formulas that are helpful in creating a rough roadmap for investing. One of the popular SIP formulas is the 15x15x15 formula. What is this formula, and how does it work? Let’s understand in this write-up –
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Benefits of SIP investment
1/11Power of Compounding No lock-in period, investor gets to choose Rupee cost averaging
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What is the minimum amount one can invest in SIP?
2/11One can start investing in a SIP mutual fund with as low as Rs 500 per month.
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What is the maximum amount one can invest in SIP?
3/11There is no maximum limit for investing in SIP mutual funds. So, you can invest as much as you can.
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Retirement Planning with SIP: What is the 15x15x15 formula?
4/11The 15x15x15 formula is a financial strategy that helps people invest in mutual funds through SIPs and accumulate wealth. Using this formula, investors can accumulate approximately Rs 1 crore in just 15 years. Let's find out how -
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How does the 15x15x15 SIP formula work? Let's break down
5/11According to the formula, the three "15s" denote three different things: First "15" represents the monthly investment in SIP. Second "15" represents the annualised return rate. Third "15" shows the number of investment years.
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Investment in mutual fund: 15x15x15 SIP formula
6/11Thus, following this formula, the investor will have to invest Rs 15,000 in SIP every month for 15 years, with an annual return rate of 15 per cent.
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Let's apply the 15x15x15 SIP Formula: See example
7/11Now, let's apply the 15x15x15 SIP Formula and calculate how much corpus one can accumulate in 15 years with a 15 per cent annual interest rate:
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15x15x15 SIP Formula: How much money do you need to invest in 15 years?
8/11According to the calculation, if a person invests Rs 15,000 every month in SIP for 15 years, then he/she will invest a total of Rs 27,00,000.
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15x15x15 SIP Formula: What will be the estimated capital gains?
9/11Since the estimated annual return is 15 per cent, the estimated capital gain in 15 years will be around Rs 74,52,946.
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15x15x15 SIP Formula: How much money would the investor receive in total?
10/11Now, after 15 years, the investor will receive a total of approximately Rs 1,01,52,946. It should be noted that this is the sum of your initial investment and the capital gains made from it.
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15x15x15 Formula: Full SIP calculation for easy understanding
11/11Monthly investment: Rs 15,000 Total investment: Rs 27,00,000 in 15 years Estimated Capital Gain: Rs 74,52,946 Total Amount Received: Rs 1,01,52,946
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