A new investment strategy has captivated the mutual fund community, enabling investors to achieve their financial dreams and goals. This strategy, known as the 9x12x15 formula, has become a game-changer in the world of mutual fund investments.
Understanding the 9x12x15 Formula
The 9x12x15 formula is a straightforward yet powerful method for determining how much to invest in a Systematic Investment Plan (SIP) to accumulate a significant corpus over time. According to this formula, an investor should invest ₹9,000 monthly in an equity-oriented mutual fund. By maintaining this investment for 15 years and assuming an annual return of 12%, the investor can expect to build a corpus of ₹45 lakh.
Achieving 12% Returns with Mutual Funds
Securing a 12% return is feasible by investing in equity-oriented large-cap or mid-cap mutual funds. Many reputable fund houses, such as HDFC, ICICI, Nippon India, Invesco, and Edelweiss, offer large and mid-cap funds that have historically provided returns around this mark. These funds are suitable for long-term investors seeking substantial growth.
Building a Large Corpus
Using the 9x12x15 formula, investors can systematically build a substantial corpus to meet various financial objectives. This corpus can be used for funding children’s higher education, marriage expenses, or retirement planning. The key is to invest consistently and allow the power of compounding to work in your favor over the 15-year period.
Common Mistakes by Mutual Fund Investors
Despite the growing popularity of SIPs, many investors make common mistakes in their investment strategy. A significant error is not having a specific financial goal. Goal-based investing is crucial for maximizing the benefits of SIPs. Without clear goals, investors may not stick to their investment plan, which can hinder their ability to build the desired corpus.
The Growing Popularity of SIPs
The popularity of SIPs has been steadily increasing in India. According to the Association of Mutual Funds in India (AMFI), the number of SIP accounts surpassed the nine crore mark in May 2024. This growth indicates a rising awareness and acceptance of systematic investment among Indian investors.
