5X15X25 SIP Strategy: Can Rs 5,000 monthly investment generate Rs 1.3 crore corpus?
Let’s decode the 5X15X25 formula and explore how you can build a huge corpus of Rs 1.3 crore and above in just 25 years by following this rule.
Just like certain life rules help us achieve our goals, there are formulas and rules for investing that can help us reach our targets quickly. Let's explore the 5-15-25 SIP strategy and how it can help generate a Rs 1.3 crore corpus. We will deal with simple calculations to find out what the estimated corpus amount can be at the end of the investment period. This simple yet powerful strategy requires disciplined investment, long-term commitment, and compounding returns. It is a great example of how starting with a small amount can convert to a big amount in the long run. Take a look.
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Understanding Compounding
It is a process to generate earnings not only on the principal amount but also on the accumulated growth during the investment period. The longer you stay invested, the more time your money gets to grow. Thus, leading to the power of compounding.
What are benefits of compounding?
It can help your investments grow faster.
It can be beneficial for long-term growth.
Reinvesting returns.
Role of SIP in mutual funds
A systematic investment plan, or SIP, is a method of investing a fixed amount in mutual funds of your choice. It allows investors to invest either daily, weekly, monthly, quarterly, or yearly.
What is 5X15X25 SIP Strategy?
The 5x15x25 SIP strategy is a simple investing approach that suggests investing a certain amount of money per month through a Systematic Investment Plan (SIP) for a certain period, aiming for an annual return at a certain rate.
5X15X25 SIP strategy breakdown
5: Represents a monthly SIP investment of Rs 5,000.
15: Denotes the target annualised return of 15 per cent.
25: Indicates the investment duration of 25 years.
How does 5x15x25 formula work?
The 5x15x25 formula means starting a mutual fund investment through SIP and continuing it for 25 years. In this formula, "5" represents a monthly SIP of Rs 5,000. "15" denotes the annualised SIP returns. Whereas "25" signifies the number of years that one needs to invest through SIP for 25 years.
5x15x25 SIP Formula: Calculation conditions
Target corpus: 1.3 crore
Monthly Investment: Rs 5,000
Expected annualised return: 15 per cent
Period: 25 years
5x15x25 SIP Formula: What will be your total investment?
Using this formula, if an investor starts a monthly SIP of Rs 5,000 and continues for 25 years, their total investment amount will be Rs 15,00,000.
5X15X25 SIP formula: What can be your capital gains?
With Rs 5,000 monthly SIP for 25 years. The estimated capital gains will be Rs 1,22,82,804.
5X15X25 formula: How much can Rs 5,000 monthly SIP build in 25 years?
The estimated retirement corpus will be Rs 1,37,82,804.