What is 15*15*15 Rule In Mutual Funds?
Investing in mutual funds can be a great way to build wealth over time. One of the simplest yet effective strategies for long-term wealth creation is the 15*15*15 Rule in mutual funds. This rule provides a structured approach to investing and gives an illustration of the power of compounding to ...read more
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Understanding the 15*15*15 Rule
The rule states that if you invest in rupees, you get the following corpus at the end of the tenure.
| Component | Explanation |
|---|---|
| Investment Amount | Rs. 15,000 per month |
| Investment Tenure | 15 years |
| Expected Annual Return | 15% |
| Final Corpus | Over Rs. 1 crore |
If you extend the same investment for another 15 years, the accumulated corpus can grow to over Rs. 10 crore, thanks to the power of compounding.
On the other hand, if you are making an SIP investment in UAE in AED, here’s how your wealth will look —
| Component | Explanation |
|---|---|
| Investment Amount | AED 634* per month |
| Investment Tenure | 15 years |
| Expected Annual Return | 15% |
| Final Corpus | Over AED 416,290* |
If you extend the same investment for another 15 years, the corpus will grow to AED 3.39
How Does the 15*15*15 Rule Work?
The power behind this rule is compounding — where returns generated on investments are reinvested, leading to exponential growth over time.
Here’s a simple breakdown of compounding with a different example —
| Investment Period | Monthly Investment (AED) | Approximate Final Amount (AED) |
|---|---|---|
| 5 Years | 1,500 | 139,567 |
| 10 Years | 1,500 | 420,286 |
| 15 Years | 1,500 | 984,914 |
This means even with a small investment in UAE, the longer you stay invested, the bigger your wealth grows.
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“Someone's sitting in the shade today because someone planted a tree a long time ago.” |
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Advantages of the 15*15*15 Rule Investment
Here’s how the 15*15*15 rule in mutual funds benefits you —
Tips for Following the Mutual Fund 15*15*15 Rule
- Start Early: The sooner you begin, the more wealth you can accumulate
- Stay Consistent: Stick to monthly contributions even if the market fluctuates
- Diversify Your Investments: Spread your funds across different sectors and mutual funds to minimise risk
- Reinvest Earnings: Allowing your returns to compound can significantly boost your final corpus
- Review Your Portfolio Periodically: Make adjustments if necessary to align with your financial goals
- Avoid Panic Selling: Market fluctuations are normal — long-term investing helps ride out volatility
Can You Earn 15% Returns?While mutual funds historically deliver good returns, 15% is an estimated average. Actual returns may vary depending on market conditions. It’s important to choose quality equity mutual funds in UAE with a strong track record. |
Conclusion
The 15*15*15 rule in mutual funds is a simple yet powerful approach to long-term investing. By staying committed to regular investments and allowing your money to compound, you can achieve significant financial growth over time. If you want to build wealth systematically, this strategy is a great starting point.
FAQs
While mutual fund returns fluctuate, historically, well-performing equity mutual funds have delivered an average 12-15% annual return over the long term.
No, market-linked investments carry risks. However, historical trends suggest long-term investing in equity funds tends to yield positive results.
The 15*15*30 rule follows the same principle but extends the investment duration to 30 years, resulting in a significantly larger corpus.
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