Power Of Compounding: Know how your child can become a crorepati by age 20 if you invest Rs 10,000 monthly

While there are many investment options available, investing in a mutual fund in your child's name can offer both security and peace of mind. Let's know how you can help make your child a crorepati by the age of 20 using the 10X20X15 investment formula.

With this formula, you only need to invest Rs 10,000 per month from the time your child is born and continue until they turns 20. Here's how it works:

The formula, 10X20X15, involves starting mutual fund investments through SIP (Systematic Investment Plan) and continuing for 20 years. In the formula - "10" represents a monthly SIP of Rs 10,000. "20" signifies the number of years, implying that you need to invest in SIP for 20 years. While "15" denotes the expected annualised SIP returns, with an average SIP return considered to be 15 per cent.

10 - a monthly SIP of Rs 10,000. 20 - the number of years 15 - expected annualised SIP returns

Using this formula, if you start a monthly SIP of Rs 10,000 and continue for 20 years, your total investment will amount to Rs 24,00,000.

With an average return rate of 15 per cent, your investment will grow, earning approximately Rs 1,27,59,550 in capital gains over 20 years.

At the end of 20 years, combining your monthly SIP investment and the capital gain earned, you will accumulate an estimated amount of Rs 1,51,59,550.

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By following the 10X20X15 formula, your child can accumulate over Rs 1.5 crore and become a crorepati by the time they turns 20. 

SIP offers significant benefits, primarily due to the power of compounding. The longer the SIP duration, the greater the compounding benefits.

SIPs offer flexible investment options, allowing you to choose the investment amount and period that suits your needs, whether monthly, quarterly, or semi-annually. Also, you have the freedom to pause, withdraw, or increase SIP investments.