Maximizing Wealth Creation through SIPs at Every Life Stage
By Harsh Shekhar, MD, Share Dealer Plus
Patna, 28th June 2023: In a bid to build wealth at every stage of life, investors are turning to Systematic Investment Plans (SIPs) in mutual funds. However, simply starting a SIP and forgetting about it is not the optimal approach to meet financial goals. It is crucial to review investments regularly, aligning SIPs with evolving life goals and adjusting risk profiles accordingly.
To assist investors in navigating their investment journey, we have categorized the SIP process into different age groups. Each life stage presents unique challenges and opportunities, taking into account individual aspirations and mindsets.
20s – Seizing the Power of Early Investing
For those in their 20s, witnessing the true impact of regular SIP investments on wealth creation is possible by starting early and remaining committed over the coming decades. While enjoying newfound freedom, it is essential to cultivate the habit of investing for future goals. Even a small investment amount, such as Rs. 100, in mutual funds through SIPs can kickstart the power of compounding with a longer time frame for growth.
30s – Balancing Financial Goals and Responsibilities
In the 30s, individuals are typically in a stable career phase with clearer financial goals. These may include purchasing a home, preparing for marriage, saving for children’s education, and taking care of elderly parents. It is also crucial to focus on retirement planning during this period. By assessing risks and goals, investors can revisit existing SIP investments or create a mutual fund portfolio aligned with their aspirations. In this age group, allocating over 60% of investments to equities and the remainder to hybrid and debt funds is a viable strategy. With increasing income, it is advisable to progressively raise SIP amounts to accelerate wealth growth and achieve financial objectives.
40s – Managing Family Obligations and Future Education Costs
The 40s bring stability in both career and family responsibilities. Financial obligations, especially higher education expenses for children, take center stage. Investing towards this goal requires a comprehensive approach, accounting for accommodation costs, living expenses, and tuition fees. Although a significant portion of income is allocated to these obligations, it remains vital to continue SIP investments for retirement planning. Risk tolerance tends to become more moderate during this phase.
50s – Strategic Investing for Retirement
Investing in mutual funds through SIPs in the 50s becomes a strategic approach to maximize remaining working years and prepare for retirement. Reevaluating risk profiles is crucial, prompting a shift towards more conservative investments such as hybrid or debt funds. With retirement on the horizon, the focus should be on building a retirement corpus to maintain one’s standard of living, cover healthcare expenses, and pursue hobbies. Increasing the SIP amount for retirement planning becomes more feasible with the growth of income.
About Share Dealer Plus:
Share Dealer Plus, a financial services distribution firm, was established in 1990. Presently, we specialize in providing distribution expertise in the regions of Bihar and Maharashtra.
At Share Dealer Plus, we spare no effort in ensuring client satisfaction. Our commitment to maintaining healthy and honest relationships with our clients has resulted in the management of over 5000 portfolios across a diverse range of investment instruments.
Our unwavering dedication revolves around offering clients disciplined, honest, and solution-based advisory services to help them achieve their desired financial goals.
