How can I invest such a small amount?
I have been asked this question for over 30 years…and have wondered ..why people cannot invest Rs. 500? or Rs. 5000?
For many people this is a very fair question..and therefore they do not think of investing till they have “a big sum like Rs. 400,000” – like Mr. Panch asked me.
And I am a strong believer of SIP (by the way there are only about 25 IFAs who have a SIP book of more than Rs. 1 crore a month!! This of course does not include banks, but banks do not sell SIP as much as they sell lumsum.
When a person is new to investing, and he is a salaried person the best thing to suggest is a SIP. Small (Rs. 500 is the minimum)…and I know of people who do SIPs for Rs. 100,000 – in 4 funds thus making the commitment Rs. 4L a month. I have also met another person who was then doing SIP of Rs. 9L per month – albeit for a short period of 3 years!!
I was initiated to SIP by Suraj Kaeley – the then head of sales/marketing in Franklin Templeton. He now heads the Marketing function in UTI..so much so that some of us would call him SIP SURAJ…and I have been addicted to it. It is sad that a very small number of IFAs are as committed to selling SIPs – the numbers should multiply. When Mr. Panch asked me about sip HE had no clue about how the equity market works…and today his equity accumulation is 3x his provident fund accumulation and he is just 53 years of age. Over the next 8 years I expect his accumulation to be about 5x his provident fund!! Not bad at all for a person who in 2000 did not know what is a SIP…i presume he is continuing his SIPs – he tells me he is !!!
As soon as you start earning – having an investible surplus – you can do a sip. Today a couple of mutual funds allow you to do an auto top up..the sip amount will go up every year – hello wait it can happen over 6 months too – and thus silently your wealth keeps inching up. I am convinced my readers did not need this post – all of them are savvy..but just in case there are some new comers…let them read it…
chandrika kulkarni
sir,
Please mame the SIPs which have auto top up facility
Deepak R Khemani
Chandrika HDFC and ICICI have this facility
kalyan
I am doing sip for the last 4,5 years and very regular about it. Never missed a month. But I never registered for a SIP. On 1st of every month I manually buy the units for the SIP amount I decided. I wonder if the low percentage of sip numbers are due to people like me …
Nikhil Karnik
Subra Sir, we sail in the same boat, Suraj being the person who got all of us in FT Sales team to be addicted to the SIP culture!!! I really regret that I missed doing a SIP in the first 7 years of my career before I joint FT, post which my SIP contribution per month has only gone up!!!
This article is pertinent even today to me in the 14th year of continuing my SIPs in Bluechip, Prima and some other funds!!!! I would not mind sharing my Bluechip and Prima SIP statements since the day I started the SIPs in case it helps converting the fence-sitters or new-comers!!!!
P.S.: All my SIPs are done through the STP route!
Kishore
I liked the last two sentences. It is like an article against cigarette smoking. Smokers will never read it. Non-smokers will read it just to be sure they are doing right thing. So, it helps.
shinua
Subra sir
happily in SIP for the last 7 years which has multiplied 15 times the monthly investing amount… happy to increase it further as every passing year is a confidence booster with the performance of my invested amount. Thanks to you and the few selfless bloggers.. God bless.
🙂
Muthu
Happy to share that we are one of the 25 Advisors who has a running SIP book of more than Rs.1 crore per month. Regularly reading your blog though I’ve not been commenting for last few years. Want to restart the same. My learning as an advisor and investor has been significant through your blog.
Vivek Hingorani
subra sir.. please suggest some good funds.. I will do my research on the same.. I currently have two SIP’s going and post september I am planning to start some more..