SIP Investment: If your account ends up empty by the end of the month, how can you start an SIP?
At the beginning of the month, one’s salary is credited to their account. Soon after, various expenses begin to pile up—groceries, clothing, travel, food delivery, weekend entertainment—and before you know it, the money is gone. By the end of the month, the account is empty.
This is the financial reality for most young people today. They rarely think about saving or investing, even though they have numerous investment options at their disposal—such as stocks and mutual funds. However, a lack of financial awareness and planning often prevents them from taking these steps.
To address this, they must first gain control over their expenses, save money, and invest it wisely. In an interview with Jagran Business, Bijendra Attri (founder of BA Capital and an AMFI-registered mutual fund distributor) offers guidance to young people on this very subject.
Why is an SIP important?
With an SIP (Systematic Investment Plan), an investor makes their own decisions. They choose an amount to be deducted each month—an amount that doesn't significantly disrupt their regular expenses or existing savings. Through an SIP, this money is deducted monthly and channeled into investments.
Over a few years, these contributions grow into a substantial corpus. You will eventually realize that this investment did not require a large lump-sum payment or significant effort, yet it yielded good returns. This is why experts strongly advocate for SIPs. Regarding investing through an SIP, Bijendra Attri notes:
Young people who have just started their careers can begin their investment journey through an SIP; for this, they should follow the 50-30-20 rule. "This means that one should allocate 50% of their salary toward necessities, 30% toward lifestyle expenses, and 20% toward savings and investments."
Don't wait too long to start an SIP.
Young people often have various needs and desires tied to their salaries, and they tend to spend their earnings as soon as they receive them. But do they think about investing? When asked, many say, "I will start investing once my salary increases."
According to Bijendra Atri, "While it is good to aspire to earn more, waiting too long to start investing—or an SIP—is not advisable. Even if your salary is modest, you can begin with a small amount."
Build your portfolio based on your goals.
When starting an SIP, you should create a well-planned portfolio. Simply making regular contributions through an SIP does not guarantee financial success. You need to determine how much you intend to invest and for what specific purpose—such as education, a wedding, or retirement. Finally, you must also decide on a timeline—that is, the duration for which you plan to invest. Bijendra Atri suggests:
"If you have a clear goal, build your portfolio accordingly, set up an SIP tailored to that portfolio, and begin your investments."
Market downturns: Should you invest or wait?
When the market falls, young people often become hesitant to invest. They fear that investing now won't yield immediate returns, so many choose to stay on the sidelines. However, experts believe that starting an SIP during such periods can be beneficial in the long run.
According to Bijendra Atri, "Market volatility is inherent to the nature of the market; it can last for short or long periods. When the market declines, shares become available at discounted rates—an ideal time to start an SIP in equity funds."
