Why Start SIP Early?

1. Compounding Needs Time

Returns earn returns. The earlier you start, the more cycles your money compounds through.

2. Rupee Cost Averaging

Fixed monthly investments buy more units when prices fall and fewer when they rise, smoothing your purchase cost.

3. Behavior Edge

Automated, bite-sized investing keeps you consistent through market noise.

Early vs Late: A Simple Comparison

• Investor A: Starts ₹5,000/month at age 25 for 15 years, then stops. Corpus keeps compounding.
• Investor B: Starts ₹10,000/month at age 35 for 15 years.

Despite investing the same or even more, B often ends with less because A gave compounding more time.

Case Study: Time vs Bigger Amount

• Investor A starts ₹5,000/month at age 25 for 15 years, then stops but stays invested until 45.
• Investor B starts ₹10,000/month at age 35 for 15 years and stops at 50.

Assuming 12% annual returns, A often ends up ahead at the common finish line (age ~50) because A’s money had more time to compound after contributions stopped.

Plan and Track with the Right Tools

• Estimate outcomes with the SIP Calculator.
• Planning a rising income? Model annual increases with the Step-Up SIP Calculator.

How Much Should You Start With?

• Start with an amount you can sustain through market dips.
• Use 50/30/20 budgeting as a guide and allocate part of the 20% (savings/investing) to SIP.
• If cash flow is tight, start with a small amount and commit to a yearly increase.

Step-Up Strategy Example

• Start ₹3,000/month and increase by 10% every year.
• After 5 years, you’ll be contributing ~₹4,800/month and the total corpus benefits from both higher contributions and compounding.
• Model the effect using the Step-Up SIP Calculator.

Practical Tips to Maximize SIPs

• Align SIP date with salary credit to avoid missed installments.
• Increase SIP 10–15% annually (step-up).
• Stay invested during downturns; they lower your average cost.
• Review funds yearly; avoid chasing last year’s winner.

Common Mistakes to Avoid

• Stopping SIPs during market corrections (that’s when you buy more units cheaper).
• Over-diversifying into too many funds (3–5 diversified funds is usually enough).
• Ignoring expense ratios and exit loads.
• Switching funds frequently based on short-term returns.

Quick FAQ

• Can I pause SIPs? Most platforms allow pausing; consider temporary pause instead of full stop.
• Debt + Equity SIP together? Yes, align mix to risk profile and goal horizon.
• Lumpsum vs SIP? Use SIP for salary cash flows, and deploy occasional lumpsums during deep corrections.

Bottom Line

Don’t wait to start “big.” Start now, start small if needed, and let time do the heavy lifting.