Hello Reader,

You can become a Crorepati by investing 15,000 per month. You may wonder how is it possible by just investing a 15,000 per month to generate a mega corpus of 1 Crore.

In this Post, we will see the Magic and Power of Compounding.

What is 15x15x15 rule?

In this rule, One has to invest 15,000 rupees per month via SIP in a equity mutual fund and the fund should generate an annual average return of 15% CAGR (compounded annualized growth rate).

If the above rule is like to happen, then you would become a Crorepati.

See below graph of Investing Growth and compounding magic:

Yes, you can generate 1crore by investing 15,000 in 15 years @15% CAGR.

How it works with other % of returns?

You may wonder which generates 15% returns and this Crorepati is just Hypothetical one.

What I would like to imply with this is the Power of Compounding which everyone should understand.

You can imagine a returns of 8% (this is by far good returns).

Check below Graph and when will you reach 1Crore.?

Yes, Just 7 years away from the previous target.

Another rule 15x15x30

Earlier, you seen 1 crore by investing 15,000 @15% returns for 15 years.

Now, if you continued the same for another 15years, you would have accumulated 10 Crores.

Here if you seen in detail, the Investment tenure multiplied by 2 times where as the return multiplied by 10times.

Warren Buffer Wealth Chart:

As you see in the above chart , The Magic of compounding played an important role in Warren Buffett’s wealth creation story.

Why to Start Early:

In Compounding the money gets multiplied in the later years. We will see with Example below.

Let’s us assume you, younger brother and your cousin started the investment journey at the same time.

You Started at the Age of 30, your brother at 25 and your Cousin at 20years.

All of you invested the same amount, Say 5000Rs and continued SIP for 10years.

All the 3 kept the amount invested till their respective age of 50 without redemption.

So , Investment remains constant for all 5000x12x10 = 6 lakh rupees.

But their Growth of the investment varies due to the time. Longer they kept their investment, Higher they reap their profits.

Younger Cousin accumulated almost double and This is all due to starting early.

Conclusion:

Whenever you see the word “compounding” , Just imagine that it works like a magic in Long term investment.

So, in the Long term investing, you are investing not only Money and but also Time.

It doesn’t matter how much you invest , all it matters is how long you stayed investing and see the Compounding magic.

Don’t worry about the delay which happened till yesterday, just start today !

Choose your Investment instrument as per your risk appetite and Start your Journey.

Happy Investing.!