If you’re looking to make your first one crore rupees in the stock market, the 15-15-15 rule is a great place to start. This rule says you can amass a crore by investing only ₹ 15,000 a month for 15 years in a stock or mutual fund offering 15% annual returns. The rule uses the power of compounding to achieve these results.
What is the power of compounding, and how can you make one crore using it?
The power of compounding is a simple concept that can significantly impact your financial future. Here’s how it works: when you invest money, you earn a return on your investment. That return is added to the principal, and the entire sum is reinvested. This process is repeated over time, and each additional return compounds upon the previous one. As a result, your wealth grows exponentially. If you invest ₹ 10,000 a month in a mutual fund with an annual return of 10%, you will have a corpus of ₹ 76,56,969 after 20 years. You would have invested a total of ₹ 24,00,000, which means that you would have tripled your original investment (3.1x). Similarly, if you invest ₹ 15,000 a month for 15 years in a mutual fund that offers 15%, you will end up with a little over one crore – ₹ 1,01,52,946, to be precise.
One of the ways to do this is through a systematic investment plan (SIP), by investing a specific amount of money regularly.
What is a SIP?
A Systematic Investment Plan, or SIP, is a type of investment in which a fixed sum of money is invested regularly at set intervals. The interval can be weekly, monthly, or annually. There are numerous benefits to investing in a SIP. First, it helps to discipline investors by forcing them to invest regularly. Second, it allows investors to rupee-cost average, which means that when the price is low, they can buy more units. When the price is high, they can only buy a few units. Over time, this can help to increase returns.
It pays to start early for your journey to one crore
There are numerous reasons to start investing early. First, you have time on your side. The earlier you start investing, the longer your money has to grow. Second, you can afford to take more risks when you’re young. As you get older, you’ll have more responsibilities and less disposable income, so you may not be able to afford to take as many risks with your investments. Third, you can learn from your mistakes. If you make a bad investment when you’re young, you’ll have plenty of time to recover from it. Fourth, compound interest can work in your favour. The longer your money is invested, the more it will grow. And finally, starting young gives you a chance to develop good habits that will serve you well throughout your life.
Let’s say that we invest ₹ 10,000 a month in a mutual fund with an annual return of 10% for 30 years. After 30 years, you will have a corpus of over two crores, ₹ 2,27,93,253, which is 6 times your investment of ₹ 36,00,000.
The earlier you start investing, the greater the power of compounding will be. Over time, even a relatively small amount of money can grow to one crore.
When it comes to mutual funds, you should invest not only money but also your time. Time is just as valuable and can do wonders for long-term portfolio growth! The 15-15-15 rule will make anyone rich if they follow this strategy correctly. Get started on your journey of making one crore rupees now.
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