Know The 15*15*15 Rule In Mutual Funds

What if building ₹1 crore wasn’t about earning big or taking huge risks but about being consistent? That’s precisely what the 15-15-15 rule shows us. It’s a simple idea: invest ₹15,000 every month for 15 years and aim for 15% annual returns. Doo that, and you could become a crorepati no complicated jargon, no trading stress just patience, discipline, and the magic of compounding. In a world where financial goals often feel out of reach, this rule creates wealth within arm’s length for anyone willing to start early and stay committed.

What is the 15 15 15 rule?

The 15-15-15 rule is a simple yet powerful formula that shows how disciplined investing can turn small monthly contributions into long-term wealth. According to this rule, if you invest ₹15,000 every month for 15 years in a mutual fund that delivers an average annual return of 15%, you could build a corpus of ₹1 crore or more. It's not magic, it’s the result of patience, regular investing through SIPS, and the compounding effect working in your favour over time. This rule benefits beginners who want a clear, achievable path to wealth without getting lost in complex financial jargon.

Here’s how it works. Let’s say you begin a SIP of ₹15,000 per month. Over 15 years, that adds up to ₹27 lakh in total investments. But when that money grows at 15% annually, you don’t just earn returns on what you invest, you also earn returns on your interest gains, thanks to compounding. As time goes on, the growth becomes exponential. So by the end of 15 years, your ₹27 lakh investment can snowball into over ₹1 crore. It’s a reminder that consistency matters more than timing. The earlier you start, the stronger the compounding effect.

What is compounding? How does it work?

Compounding is the process where the money you invest starts earning returns, and then those returns begin to earn returns too. It’s often called the “eighth wonder of the world” because of how powerful it can be over time. Instead of earning interest on your original amount, you also earn the already added interest. The longer you stay invested, the more this snowball effect kicks in. It’s like planting a tree that grows tall and drops seeds that grow into more trees.

Now let’s connect this to the 15-15-15 rule. If you invest ₹15,000 every month, you’ll invest ₹1.8 lakh a year. Over 15 years, that adds up to ₹27 lakh. But here’s where compounding does its magic: if your investment grows at 15% annually, you won’t just get ₹27 lakh back, you could end up with over ₹1 crore. Why? Because each year, your returns get added to your principal, and those returns also begin to earn interest. By the final few years, the compounding effect is so strong that the growth accelerates rapidly. That’s the real secret behind turning regular SIPS into serious wealth.

Power of compounding 

Compounding doesn’t just grow your money, it multiplies it beyond what most people expect. The earlier you start, the greater the impact, even if you invest the same amount. Let’s look at two investors, Varsha and Shreysee, to show this in action. Both invest ₹5,000 per month in a mutual fund earning 12% annually. The only difference? Varsha starts at age 20, while Shreysee begins at 30. The table below reveals how a 10-year head start can significantly affect long-term wealth.

Is a 15% Return Realistic?

The idea of earning 15% annual returns might sound too good to be true, especially compared to traditional options like FDS or savings accounts. But this figure isn’t pulled out of thin air in the world of equity mutual funds. Over the long term, 10 to 15 years or more, many well-performing equity funds in India have historically delivered average returns of 12% to 15% per annum. Of course, these returns aren’t fixed or guaranteed because they depend on market conditions, fund selection, and how long you stay invested. But if you stay the course, double-digit growth will improve significantly.

That said, it’s essential to manage expectations. Markets can be volatile in the short term, and there will be years when returns fall short or even go negative. But that’s precisely why long-term investing matters. When you give your money time, those short-term ups and downs will smooth out. So yes, while 15% may not be guaranteed every year, it’s a realistic target if you invest smartly, consistently, and with a long-term horizon.

How to Maximise Return Potential

Getting good returns isn’t just about investing money; it’s about investing smartly. To make the most of your mutual fund journey, start early. Time is the biggest ally when it comes to compounding. Even a few years' head start can create a big difference, as we saw in the Varsha and Shreysee example. Next, stay consistent with your SIPS, no matter what the market is doing. Skipping investments during a downturn or trying to “time the market” often does more harm than good. The goal is not to react emotionally, but to stay committed and let your money work quietly in the background.

You can also boost your returns by reviewing your portfolio once a year. It might be time to switch if a fund underperforms consistently or strays from your goal. Choose mutual funds with a proven track record, managed by experienced fund managers, and suited to your risk profile. 

You don’t have to keep investing the same amount forever. As your income grows, it’s okay to increase your SIP slowly, maybe add ₹500 or ₹1,000 more every year. It won’t pinch your pocket much, but over time, it can make a massive difference to what you end up with. You don’t need to make minor adjustments; staying regular is enough to move the needle in a big way.

Conclusion

You don’t need to start big or have it all sorted to begin building wealth. What matters is getting started, even with a small amount, and showing up consistently. The 15-15-15 rule is all about proving that steady, simple steps can go a long way. So whether you’re just beginning or already on your path, every rupee you invest is a step closer to your future. There’s no “too late” when you’re moving forward.