Have you added to your monthly SIP amount? Overcoming the pitfalls of stagnancy in your SIPs

Systematic Investment plans (SIPs) have long been the go-to strategy for disciplined and consistent investing habits, but most Investors start a Systematic Investment Plan (SIP) and then forget about it. While SIPs are a great starting point, they are not a “set-it-and-forget-it” solution.

Imagine this: You started a Rs. 10,000 SIP five years ago and never increased it. Today, your salary has increased, expenses have grown, but your SIP?

Still the same. Inflation, income growth, and evolving financial goals demand that your SIPs grow too.

Have you ever wondered:

1.Is my current SIP amount enough to meet future financial needs?

2. Am I factoring in inflation’s impact on my investments?

3. Has my income grown, but my SIP amount remained the same?

If your answer is YES to the last question, its time to top up your SIPs!

How to overcome SIP Stagnancy?

Use the “Annual SIP Top-Up rule”

Consider increasing your SIP amount by 10-15% every year. The below illustration explains how topping up your SIP yearly by 10% could have a huge impact on your wealth as against continuing with the same SIP amount for 20 years.

SIP Top Up by 10% Vs Normal SIP for 20 years:

Link SIP Growth to your salary hike

Whenever you get a raise, consider increasing your SIP proportionally. For e.g. If your salary grows by 10% annually, You may consider to Top up your SIP by at least 10% every year.

Invest your Bonuses & Windfalls

Instead of splurging, allocate a portion of bonus into your existing SIP.

Track & Adjust your SIPs

Schedule a bi-annual or annual review to ensure your investments align with your long-term goals. If you’re falling short, increase your SIP accordingly.

A stagnant SIP is a missed opportunity. By topping up your SIP regularly, you could stay ahead of inflation, align with your income growth and reach your goals faster.

So, ask yourself again – have you topped up your SIP this year? If not, do it today!

Happy Investing!

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