5x15x25 Formula: How soon can Rs 5,000/month SIP grow to over Rs 1.6 crore at a given expected return? See calculations
5x15x25 Formula: Although there are many investment avenues available today, investing in a mutual fund SIP is one of the most popular strategies to build substantial wealth. Learn how the 5x15x25 formula will help you to grow over Rs 1.6 crore and make you a crorepati in less than 25 years.
SIP Investment, 5x15x25 Formula: There are numerous options in the market for investing, but one of the most popular strategies for building significant wealth is through mutual fund SIPs (Systematic Investment Plans). It offers a structured way to invest regularly, making them a favorable choice for long-term wealth accumulation.
Invest in SIP
If you are someone who wants to build a large corpus through disciplined, regular contributions then SIP investing can be one of the best options for you. And if you are considering mutual funds, then let me tell you that the 5x15x25 formula may help you create over Rs 1.60 crore corpus in 25 years. This is how it works:
SIP Investment: How does the 5x15x25 formula work?
The formula, 5x15x25, involves starting mutual fund investments through SIP (Systematic Investment Plan) and continuing for 25 years. In the formula - "5" represents a monthly SIP of Rs 5,000. "15" denotes the annualised SIP returns. While "25" signifies the number of years, implying that you need to invest in SIP for 25 years.
5x15x25 SIP Formula: Your total investment
Using this formula, if you start a monthly SIP of Rs 5,000 and continue for 25 years, your total investment will amount to Rs 15,00,000.
5x15x25 SIP Formula: Calculating expected annualised return
With an average return rate of 15 per cent, your investment will grow, earning approximately Rs 1,49,20,369 in long-term capital gains over 25 years.
5x15x25 SIP Formula: Calculation to create corpus of over Rs 1.5 crore
At the end of the 25-year period, combining your initial investment and the long-term capital gain earned, you will accumulate an estimated amount of Rs 1,64,20,369.
5x15x25 SIP Formula: You become crorepati in 25 years
By following the 5x15x25 formula, you can amass Rs 1.64 crore and become a crorepati in less than 25 years.
Benefits of SIP
SIP offers significant benefits, primarily due to the power of compounding. The longer the SIP duration, the greater the compounding benefits.
SIP offers growth potential
With an average annual return of 15 per cent, SIPs offer substantial growth, outperforming many other investment schemes. Additionally, the rupee cost averaging feature ensures that expenses remain stable, even during market fluctuations.
Provides flexibility
SIPs offer flexible investment options, allowing you to choose the investment amount and period that suits your needs, whether monthly, quarterly, or semi-annually.
Freedom to pause, withdraw, or increase investments
As per your financial requirements, you have the freedom to pause, withdraw, or increase SIP investments.