Mutual Fund Calculator: Due to the challenging professional life and increasing workload at the workplace, a good number of salaried people want to retire a little earlier. For such professionals one needs to start investing from the early stages of one’s career.
according to tax and Investment According to experts investing from early life enables an investor to achieve such goals with minimal risk. He said that one can plan for early retirement by investing in mutual funds. He advised young professionals to invest in monthly mutual fund SIP (Systematic Investment Plan) as it gives returns of around 15 per cent annually in the long term.
Speaking on the importance of investing early in Mutual Funds, Pankaj Mathpal, MD & CEO, Optima Money Managers said, “If an investor starts investing from a young age or from 25 years, he has around 35 years to invest. In such a case, if a professional is planning to retire early or say by the age of 50, he/she will still have 25 years to invest, which is not a short time.”
15 X 15 X 15 Rule of Mutual Funds
To remind how investing from an early age can help an investor achieve his investment goal easily, Pankaj Mathpal said, “The 15 X 15 X 15 rule of mutual funds needs to be remembered. This rule states that if an investor invests 15,000 for 15 years, then one can expect 15 percent return on his money and the maturity amount will be approximately 1 crore. However, my suggestion to the investor is to increase your monthly SIP amount with the increase in your annual income using annual SIP step-up. This will increase the chances of achieving one’s investment goal with the lowest possible monthly SIP amount.”
On what annual SIP would be appropriate for an investor, Karthik Jhaveri, Manager – Wealth Management, Transcend Capital, said, “Generally, we recommend increasing the annual SIP by 10 per cent. But, if one retires by the age of 50, For such professionals, I suggest to use SIP at 15% per annum.
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If an investor starts a monthly SIP 15,000 at the age of 25, then as per the 15 X 15 X 15 rule of mutual funds, one can expect 15 per cent annual return on one’s money for the next 25 years. As per the SIP calculator, if an investor uses 15 per cent annual growth in his monthly SIP, he would be able to grow approx. 14 crores in 25 years or till he turns 50 years old.