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Mutual Funds: How step-up SIPs give a boost to your wealth?


When we set aside a small amount of money for the future, we understand the power of SIPs; and when we continue investing, we see the magic of compounding. 

But if you want to see real sorcery then you must add a dash of “annual step up” to your SIP. The difference in your corpus will be astounding!


Here are a few ways in which you can make a SIP step up strategy successful in the long run.
First, align your SIP to a clearly defined, time bound goal that is meaningful to you.

Second, the management of behavioural pitfalls is key. Returns from equity-oriented SIPs are non-linear; and frustrating, elongated low return phases are not at all uncommon.


Third, don’t overextend yourself. The thumb rule for a successful step-up plan is that it should be like a slow jog – it should feel easy, so that you can do it for a very long time without feeling the heat!


Finally, put it on autopilot.  Make use of the tech tools available these days and lock in a fixed amount increase at the point of starting itself which you can cancel later.

And if a contingency compels you to scale back your step-up plan, so be it! When it comes to long term goals, there will be numerous ways to course correct.

If you can execute the SIP plus Time plus step up strategy in your investing, the sky is the limit. There truly is no aspirational goal that you cannot meet!


Click here to know more about step up SIPs.

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Mutual Funds: How step-up SIPs give a boost to your wealth?

Step up SIPs are a powerful weapon for creating wealth by investing a small amount regularly over a long period of time, provided it is coupled with a well-defined goal, the right behaviour and a disciplined approach.

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