Want to Become a 'Crorepati' Before 40? Try This Straightforward Mutual Fund Strategy
Market experts are offering guidance to the new generation of investors, often referred to as Generation Z (Gen-Z), who aspire to attain financial milestones, including becoming a millionaire or 'crorepati' at a young age.
Market experts are offering guidance to the new generation of investors, often referred to as Generation Z (Gen-Z), who aspire to attain financial milestones, including becoming a millionaire or 'crorepati' at a young age. To help them reach this goal, experts recommend following the straightforward "15x15x15" rule.
The rule entails disciplined investment, involving a monthly investment of Rs. 15,000 for 15 years, with an expected return of 15 percent. This strategy promises to create a substantial wealth of Rs. 1 crore by the time the investor reaches 40 years of age. However, experts emphasize the importance of understanding key factors: the investment amount, the number of years, and the expected return.
While this plan seems promising on paper, maintaining consistency over such an extended period can be challenging due to market volatility. It's noted that over 95 percent of Systematic Investment Plans (SIPs) do not complete their fifth year, often due to investor behavior influenced by market fluctuations.
Experts stress the need for a robust investment process and discipline to overcome these challenges. They also recommend adjusting the investment amount as income increases over the years, aligning savings with salary hikes.
Furthermore, investors have the option to consider higher-risk funds, such as small-cap or mid-cap funds, to potentially achieve more aggressive returns of 15 percent or higher over the long term. However, these funds come with increased volatility, requiring patience and a long-term perspective.
Despite the appeal of the "15x15x15" strategy, experts advise caution and a realistic approach to return expectations. They suggest setting return expectations in line with the country's nominal GDP growth rate, which in India is around 12 percent. By gradually increasing savings in proportion to salary hikes, investors can work towards building a substantial corpus.
Disclaimer: It is strongly recommended that you consult a qualified broker or financial advisor before making any investment or trading decisions. The information provided here should not be the sole basis for your trading choices.
While investment strategies like "15x15x15" hold potential, investors should remain prudent, maintain discipline, and adapt to market realities to achieve their financial goals.