New to investing? In this article you will learn how to start your Systematic Investment Plan (SIP), how to set goals, how to decide your funds and how will your money grow.
Why is SIP a Magic?
You have two options. Leave your money in savings or start an SIP. If you leave it idle in savings account, your money will move a tortoise speed. On the other hand, if you start an SIP, your money will move, fall, jump, and eventually it will have wings
SIP is nothing fancy: you invest a fixed amount in mutual funds regularly (usually monthly). Over time, little drops turn into an ocean
Step 1: Decide why you are investing in SIP
This is a very important question. You must ask yourself “am I investing to buy a car, go on a vacation, buy a house, or is it for retirement?
Step 2: Choose your Risks
You have 3 options to invest. Equity, Debt and Hybrid.
Equities are risky as they tend to give you awesome returns when the market is doing well but you might lose your money in the short term if the market is shaky.
Debt funds are mostly safe and stable. Consider it like your bank accounts savings, but they give slightly higher returns than your savings accounts.
Hybrid is a mix of both. Your money is invested in risky and stable funds.
Step 3: Complete KYC
Keep your Aadhaar and PAN ready, fill in your details on a mutual fund app or website, and complete eKYC using OTP and document upload. Some platforms may ask for a quick video or in-person check.
Once approved—usually within a day—you can start investing through apps like Groww, Zerodha Coin, Paytm Money, ET Money, Kuvera, or Upstox, as well as directly on mutual fund company websites or via brokers.
Step 4: Pick the Right Mutual Fund
Don’t choose the funds that are trending that year. Always while choosing a fund, look for its consistent performance over the last few years.
Step 5: Start Small, Scale Later
You don’t require Rs. 50,000 to Rs. 1,00,000 per month to invest. The more important thing is discipline. So, if you can maintain that discipline and keep investing, eventually it grows on to become a huge amount.
Step 6: Automate Your SIP
You must automate your savings every month. That means that you don’t have to remember to invest every time.
Step 7: Be Patient, Not Restless
Remember the markets can go up and down with the change in political condition, change in taxation systems. The general sentiments of the market may go up and down, which means that your SIP amount returns will also go up and down. But this is not a state to panic. If you are consistent enough, you are disciplined enough, and keep investing, you utilize these lows in the market. And eventually, as the market moves, your money also grows. So the key is to not panic, stay invested, stay disciplined, to benefit from the results.
Step 8: Review Once a Year
Keep reviewing your SIP once a year. If you see that it is growing, stay invested. If you see that it is underperforming, you can switch to a different SIP. There is an option of switching within the app. But, do not keep switching month after month or very frequently. That just breaks the flow.
The best day to start an SIP was yesterday. The second-best day is today.
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