If you’re looking to build a corpus of Rs 1 crore in the future, then understanding the rule of 15x15x15 is important for you. It’s a pretty simple rule and embracing it can help you build a sizeable fund for your future needs. It is a great option for resident and NRI investors looking to build a fund for the future by investing in mutual funds. We here take a look at the 15x15x15 rule, the power of compounding, and how NRI investors and residents can make Rs 1 crore wealth in 15 years with this trick.
Also read: How to Make 1 Crore in 10 Years by SIP?
What is the 15x15x15 rule in Mutual Funds for NRI?
The rule of 15x15x15 states that investing Rs 15000 a month for 15 years at a return of 15% per annum will give you a wealth of Rs 1 crore at the end of 15 years. This works on the basis of the power of compounding which allows your wealth to compound and generate higher returns over a longer period. It is one of the basic rules of investing for NRIs and residents looking to build good wealth for future investment goals.
Also read: Best SIP to Invest in 2024 – Top 10 SIP Mutual Fund Plans for NRIs/OCIs
What is the Power of Compounding?
The term power on compounding works on the principle where the small investments made on a regular basis grow to become a significant amount in the longer run. What actually happens during compounding is that your interest earned during the previous compounding period will in turn earn interest during the next term. This allows your invested money to make more money. The power of compounding is one of the very foundations of investment principles and has helped many investors build wealth in the long run.
Also read: How to start investing for beginners: Investment guide for NRIs
How does the Power of Compounding Work?
Let’s take a look at the below example to understand it better.
| Particulars | Abhay | Bishwas | Chaitanya |
| Age when entered into investing | 25 years | 30 years | 35years |
| Age when exited | 60 years | 60 years | 60 years |
| Investment Period | 35 years | 30 years | 25 years |
| Monthly SIP | 15000 | 15000 | 15000 |
| Total Investment | Rs 63 lacs | Rs 54 lacs | Rs 45 lacs |
| Final Corpus | Rs 22.29 crores (approx) | Rs 10.51 crores (approx) | Rs 4.93 crores (approx) |
| Growth | 35.38 times | 19.46 times | 10.96 times |
We’ve taken three examples of Abhay, Bishwas, and Chaitanya who all started their investing journey at different age groups. For comparison metrics, we’ve taken Rs 15,000 SIP investment for them. Since all three investors started at different time frames, their investment horizons are different from each other. But you can see how starting early gave Abhay the opportunity to get 35.38 times the return on his investment with the power of compounding while Chaitanya could only generate 10.96 times the return on his investment. This is how significant the power of compounding is and why starting early and having an investment discipline is a must.
Also read: Top 5 Tips for NRIs to Pick a Winning Mutual Fund
How does the 15x15x15 rule work?
Let’s use this tabular example to have a clear understanding of how the rule of 15x15x15 works. As we aforementioned, this rule mentions that investing Rs 15,000 a month for 15 years at an expected rate of return of 15% will result in Rs 1 crore (Rs 1.01 crore approx.). If you compare the investment outlay, it’s Rs 27 lacs upon which the power of compounding makes it Rs 1 crore at the end of the period giving a staggering return of 3.78 times almost quadrupling your investment.
| Particulars | Devansh |
| Monthly SIP | Rs 15,000 |
| Time frame of investment | 15 years |
| Expected return | 15% |
| Total investment | Rs 27 lacs |
| Final Corpus | Rs 1.01 crores |
| Growth rate | 3.78 times |
How to build wealth of Rs 1 crore as NRI?
If you’re an NRI looking to invest in the Indian markets via mutual funds and build a sizeable wealth for your future, then SBNRI can help you in your investing journey. SBNRI is an NRI-first dedicated platform that allows NRIs from across the world to make investments in various mutual fund schemes in India to build wealth and become crorepati by utilizing the power of compounding and growth from the market returns in mutual funds.
NRIs can now download the SBNRI App and choose to invest in different NRI mutual fund schemes in India with ease. You can also get detailed investment advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.
SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.
FAQs
What is the 15x15x15 rule in mutual funds?
- The rule of 15x15x15 states that investing Rs 15000 a month for 15 years at a return of 15% per annum will give you a wealth of Rs 1 crore at the end of 15 years.
How to make Rs 1 crore wealth from mutual funds?
- You can use the rule of 15x15x15 to make a wealth of Rs 1 crore from mutual funds. With this rule of 15x15x15, you can invest Rs 15,000 a month for 15 years at an expected return of 15% and can generate Rs 1 crore (Rs 1.01 crore approx.) after 15 years.
Can I earn Rs 1 crore from mutual funds?
- Yes, you can earn Rs 1 crore from mutual funds by following the rule of 15x15x15. With this rule and the power of compounding you can become a crorepati from mutual funds.
What is compounding?
- The term compounding means that the small investments made on a regular basis grow to become a significant amount in the long run.
Can NRIs become crorepati from mutual funds?
- Yes, NRIs can invest in various mutual fund schemes in India. If an NRI follows the rule of 15x15x15 and invests Rs 15000 a month in SIP for 15 years with an expected rate of return of 15%, then they will become crorepati after 15 years with a wealth corpus of Rs 1 crore.
