SIP Investment, 18x15x12 Formula: How investing Rs 15K monthly can build a corpus of Rs 1.14 crore in 18 yrs | Know Calculation

SIP Investment Formula for Building Substantial Corpus: Every parent wants to give the best and stress-free life to their child. Be it a son or a daughter, empowering their financial future is one of the primary objectives of a parent's life. And proper financial planning plays an important role in this journey. Although there are many investment avenues available today, investing in a mutual fund in your child's name can provide peace of mind. Let us know how you can make your child a millionaire by the age of 18 by investing in an 18x15x12 formula.

SIP Investment: How 18x15x12 formula of SIP work?

The formula, 18x15x12, involves starting mutual fund investments through SIP (Systematic Investment Plan) soon after the birth of your child and continuing till they turn 18. In the formula - the "18" signifies the number of years, implying that you need to invest in SIP from your child's birth and persist until they reach 18. The "15" represents a monthly SIP of Rs 15,000, and "12" denotes the anticipated returns, with an average SIP return considered to be 12 percent.

18x15x12 SIP Formula: Calculation to create a corpus of over Rs 1 crore

Applying this formula, if you start a monthly SIP of Rs 15,000 in the name of the child as soon as he/she is born and continue it for 18 years, then you will invest a total of Rs 32,40,000 in 18 years. Calculating the average return of SIP at 12 per cent, a total of Rs 82,41,589 will be received as interest on this amount in 18 years. Consequently, at the end of 18 years, including the principal investment and interest, you will get a total of Rs 1,14,81,589. Therefore, when your child reaches 18, they will possess a substantial amount of Rs 1,14,81,589, facilitating the fulfillment of their every need.

Benefits of SIP

SIP offers significant benefits, primarily due to the power of compounding. The longer the SIP duration, the greater the compounding benefits. With an average return of 12 percent, which surpasses most other schemes, SIP offers considerable growth potential. Additionally, the rupee cost averaging feature ensures that expenses remain stable, even during market fluctuations.

Apart from that, SIP investment provides flexibility in terms of investment period and amount, allowing you to choose monthly, quarterly, or semi-annual investment options according to your convenience. Moreover, you have the freedom to pause, withdraw, or increase SIP investments as per your financial requirements.