“Compound interest is the eighth wonder of the world. He who understands it earns it and, he who doesn’t pay for it”- Albert Einstein.
With this quote, the renowned genius wanted to highlight the importance of the ‘power of compounding,’ which holds true in investing too.
That’s because, when you invest for the long term, the interest amount you earned on your invested money also starts earning interest, resulting in a huge corpus over the long term.
This 15*15*15 rule implies the same benefits of ‘power of compounding.’ It states that if an investor starts a SIP of Rs 15,000 per month at an assumed CAGR (compounded annualized growth rate) of 15% for 15 years, it can fetch you an amazing wealth of Rs 1 Crore upon maturity.
Apart from this, there is also one more 15*15*30 rule that you should be aware of
Rs. 15,000 SIP at an assumed CAGR of 15% for 30 years can give you return of Rs. 10 Crore upon maturity. By just increasing your tenure by 15 years, one can get ten times more return. The investment amount is Rs 54 lakhs, but the amount accumulated by then is Rs 10 Crore.
The moral of the story is that if you want to create wealth, you need to keep patience and stay invested for the long term.
“Wealth cannot be earned. It has to be created. “
Pramada Finserv 