Have a mutual fund SIP? You must review it from time to time. Here’s why

When we are young and single, our goals may revolve around buying fast cars and motorcycles or going for exotic vacations. But, with changing times, added responsibilities and increasing maturity, the old goals may get replaced by new goals that focus more on owning a home for your family, saving for their health, medical and education expenses, securing their future, owning a family car, going for family vacations and giving them a good life.

When your financial goals can change with time, why should your mutual fund SIPs remain the same?

So, in order to keep up with your changing goals, using the power of compounding to make your money make more money for you and achieving your desired goals at your desired time, it is extremely important to reconsider your mutual fund SIPs with your changing money goals.

If Your Dreams Are Big, Your SIPs Should Be Big Too
Instead of owning a normal home, normal car and living a normal life, if you prefer owning a high-end home, high-end car and living the high life, the amount that you invest in SIPs should be high too.

For example, if you wish to buy a home of approx. Rs 1.5 crore in 10 years without taking a home loan, considering a growth rate of 12 percent per annum, your monthly SIP amount needs to be approx. Rs 65,000 for 10 years.

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And if you wish to buy a car worth Rs 25 lakh in 5 years, considering a growth rate of 10 percent, your monthly SIP amount needs to be approx. Rs 32,000 for 5 years.

Moreover, starting your SIPs in equities, especially during market corrections or dips is more beneficial, as a rise in the market and inflation-adjusted returns may also help you create a considerable amount of wealth in the long term by taking calculated risks. However, investing in the stock market is subject to marketing volatility and thus investing through SIPs will be more beneficial. So, it is important to consult your wealth manager before making any such decisions.

How Important It Is To Have A Wealth Manager?
Investing is not as easy as it seems. It has many more aspects other than investing in the top-rated and most recommended investment options.

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Investment planning is a detailed and complex process that involves the analysis of your current financial status, current income, probability of growth in income, risk profiling, financial goals, future requirements, exploring investment options that match with your risk profile and financial goals, identifying the credibility of the investment options and much more.

Thus, you need to have a certified, experienced and expert wealth manager who guides you at every step of your financial journey towards growth, security, stability and freedom.

No Matter What… Savings Come First!
While everything may change, some rules never change. And here’s one such rule of investment that never changes and continues to be the backbone of saving and investment planning.

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Most people tend to save the money that is left after managing their essential as well as luxury expenses. Most of the time, everything that you earn is spent and there is no money left to save. This modus operandi is never going to let you achieve your saving goals and realise the dreams that you wish to realise by utilising your savings.

If your dreams are your priority, your savings should be too. So, instead of saving the leftover amount, you should use following the formula;

Total Income – Total Savings = Expenses
After saving at least 30% of your income, manage your expenses in what is left. This strategy will definitely help you to achieve your saving goals and realise your dreams.

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So, the next time you start your SIPs, do not forget to consult your wealth manager, save first and change your investment allocations every time you change your goals.

(The author, Manish Hingar is Founder, Fintoo. The views are his own)

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