Key Points
When an investor chooses a mutual fund, they have a goal in their mind of how much return to expect, how much corpus will they generate after investing a particular amount on a regular interval...
This rule says that a mutual fund investor will earn 15% return if the investment is made for a longer period...
By investing 15% of the income for 15 years in any mutual fund with an expected 15% annual return, an investor can accumulate a large corpus over a long period of time...
For example, if an investor earns Rs 50,000 per month and invests in a mutual fund with 15% expected return Rs 7,500 for 15 years that offers an annual return of 15% will give Rs 57.65 lakh at the end of that specified period...
The inflation reduces the purchasing power of money and erodes savings. By investing in a mutual fund that gives 15% annual return, an investor can beat inflation and help in preserving the value of money...
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