Mutual Funds: A common mistake that a long-term SIP investor makes is to continue with the same monthly amount for a long period, say experts.
• SIP calculator: The 15 X 15 X 15 rule of mutual funds suggests that with a tenure of 15 years or more, 15 per cent annualized returns can be expected.
Mutual fund investments are considered a good investment tool for a long-term investor who is willing to take limited risk. The risk factor in equity mutual funds gets further reduced if the investor has chosen to invest through systematic investment plan or SIP route. In mutual fund SIP investment, an investor gets an average return on growth given by the markets over the period of investment. Hence, investment experts recommend that long-term SIPs can be started anytime and one should continue investing in SIPs regardless of market movements. While it is advisable to start investing as early as possible, but if one could not start saving for their long-term goal at an early stage of their career, Mutual Fund SIPs help them achieve their long-term goal with some adaptations. can help.
Karthik Jhaveri, Manager of Wealth at Transcend Capital said, “A common mistake that a long term mutual fund SIP investor makes is to continue with the same monthly SIP amount. For a longer period. However, smart practice can increase one's income. In other words, one has to increase his monthly SIP on yearly basis. It helps an investor to achieve his long term goal with minimum possible SIP amount. Annual step in SIP amount also. Helps an investor to achieve his long-term investment goal in the shortest possible time. Hence, a late investor can start a monthly SIP using annual step up to achieve his long-term goal.”
15 X 15 X 15 Mutual Fund Rule
On how to create a wealth of ₹10 crore in 20 years, Sebi registered tax and investment expert Jitendra Solanki said, “The 15 X 15 X 15 rule of mutual funds shows that if the time frame is 15 years or 15 per cent per annum Returns can expect higher. Hence, a mutual fund SIP investor investing for 20 years can expect 15 per cent return on one's money if the mutual fund scheme is chosen with proper homework. However, Expected to generate ₹10 crore in 20 years at 15 per cent per annum, the return would require starting a monthly SIP of around ₹75,000, which is a must-have for a middle middle class or even upper middle class individual. Will not be an easy task.Therefore, one has to use the annual move to bring this hefty ₹75,000 under one's reach.
As for how much annual step would be enough to meet one's 10 crore target, Karthik Jhaveri of Transcend Capital said, "The usual practice is 10 per cent annual step in one's SIP, but if the investor failed to start investing at the initial stage In one's career, then a 15 percent annual move would be enough to meet one's long-term investment goal in the shortest possible time."
mutual fund calculator
Assuming 15 per cent annual return and 15 per cent annual growth in one's monthly SIP amount, the Mutual Fund SIP calculator suggests that a monthly SIP of 26,500 to 27,000 would be required to accumulate 10 crores in 20 years.
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