“So When Should I Start?”
Debunking the Remaining Myths on SIPs
Naidu poured himself a glass of water as Srini continued.
“You asked why SIPs are still trusted so much,” Srini said.
“Because even though SIPs don’t guarantee profits, they build discipline.
And discipline, not luck, creates long-term wealth.”
“So SIP is basically paying myself first every month,” Naidu
summarised.
“Exactly. And here’s another myth, many people think SIPs are
only for long-term goals.”
“That’s what I believed too,” Naidu admitted.
“SIPs work for long-term goals like retirement,” Srini said,
“but they can also be used for short-term goals like vacations or down-payment
planning. It depends on the type of fund and your risk appetite.”
Naidu suddenly smiled. “You know, I almost dropped the idea
because I thought SIP needs big money. I assumed minimum ₹5,000 or something.”
Srini laughed. “That’s the best myth of all. You can start
SIPs with ₹500 a month. The point is to start, and increase gradually as income
grows.”
“Hmmm…” Naidu paused. “Another friend told me once you start
an SIP, you can’t stop or change it. Is that true?”
“No,” Srini shook his head. “You can increase, decrease, pause
or cancel an SIP anytime. You’re completely in control.”
“That’s a relief!” Naidu exhaled. “But one last doubt, does
SIP remove the need to time the market?”
“It reduces it, but it doesn’t eliminate it,” Srini clarified.
“Instead of throwing one big lump sum at the market hoping the timing is right,
SIP spreads your investment across months. But you still need to choose the
right funds and review performance periodically.”
Naidu leaned forward. “So overall, SIPs are not magic, but
they create a system. And the system creates money.”
Srini smiled. “Now you’ve got it.”
“And why do you personally recommend SIPs?” Naidu asked.
“For four simple reasons:
1. They
force disciplined investing even on months when spending temptation is
high.
2. They are
flexible you start small and scale up.
3. They
average out cost protecting against market volatility.
4. They make
investing effortless thanks to auto-debit.”
Naidu stood up excitedly. “Enough talk, I’m ready to start.
Let’s fix how much and where to invest.”
Srini laughed. “We’ll plan based on your goals. Investing
without clarity is like driving without a destination.”
As they walked out of the café, Naidu said, “I came thinking
SIP means guaranteed plan. Now I leave thinking SIP means guaranteed
discipline.”
Srini smiled. “And discipline,” he replied, “is what
ultimately builds wealth.”
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