The 15-15-15 Rule: Your Key to Long-Term Wealth Creation

Have you seen a video of a snowball rolling downhill? It often starts small, but as it gathers speed, it picks up more and more snow, growing bigger and bigger. That's the magic of compounding, the core principle behind the powerful 15-15-15 rule for mutual fund investing.
What is the 15-15-15 rule?
It is a simplified way to understand how consistent investing and long-term returns can help you accumulate a significant corpus. Here's the breakdown:
● Invest Rs. 15,000 per month: This is your fixed monthly investment amount through a Systematic Investment Plan (SIP) in a mutual fund scheme.
● Invest for 15 years: Discipline and consistency are key. By sticking to your SIP for 15 years, you allow your money to grow steadily.
● Earn a 15% annual return: This is an estimated average annual return that equity mutual funds have historically delivered in India [source: Value Research]. It's important to remember that past performance is not a guarantee of future results, but it gives you a benchmark.
Following the rule, with these assumptions, you could potentially accumulate around Rs. 1 crore in 15 years. That's a powerful example of how even seemingly small contributions can grow significantly over time.
Why is it so effective?
The secret here is compounding. Just like the snowball rolling downhill, your returns are not just on your initial investment, but also on the gains you've made earlier. It's like earning interest on your interest.