There is a particular kind of satisfaction that comes from starting a SIP. You have researched the fund, set up the mandate, and watched the first deduction happen on schedule. It feels like the beginning of something. And it is.
For those who are new to this column, a SIP, or Systematic Investment Plan, is a method of investing a fixed amount every month into a mutual fund, automatically, on a date you choose. We spoke about SIPs in detail in earlier columns. The short version is this: it removes the pressure of timing the market, builds discipline through consistency, and lets compounding quietly do its work over time. If you have not yet started one, that is the first step. But if you have, this column is about the follow-up step that most investors never take, and which in the long run matters more than the fund you chose or the platform you used.
Most SIPs in India are started and then left exactly as they are. The same amount, every month, for years. The salary grows, the responsibilities grow, the cost of living grows, but the SIP stays fixed at the number that felt right when it was first set up. This is understandable. Inertia is powerful. A SIP that runs without attention feels efficient. Why disturb something that is already working?
Because the amount you chose three years ago was right for three years ago. Your life has moved since then.
Think about what has happened in the years since you started investing. Your income is likely higher than it was. Some expenses that once felt heavy have become routine. Children have grown, loans have reduced, or your household has found its rhythm. And yet the SIP continues at the original amount, quietly, as if nothing has changed. The discipline you built is working. But it is working on old numbers.
Here is the calculation that tends to change minds. If you invest five thousand rupees a month for twenty years at twelve percent annual returns, you will have put in twelve lakh of your own money. The corpus at the end will be approximately forty-nine lakh rupees. That is the power of consistency and time, and it is genuinely impressive.
ALSO READ- You Pay Tax on Your Gains. Here Is How to Pay Less on Your Income
Now change just one thing. Each year, on the anniversary of your SIP, you increase the amount by ten percent. In the second year you invest five thousand five hundred. In the third, six thousand and fifty. And so on, stepping up by ten percent each year. The total you invest over twenty years is approximately thirty-two lakh rupees. The corpus: roughly one crore twenty-two lakh rupees.
The same fund. The same twenty years. The only difference is a ten percent annual increase, which for most investors in India tracks closely with how salaries actually grow. And the difference in outcome is not marginal. It is the difference between forty-nine lakh and one crore twenty-two lakh.
What makes this even more interesting is the psychology of it. When you decide today that you will increase your SIP by ten percent next year, you are pre-committing before the salary increase has been absorbed into a new lifestyle. Income rises, spending rises to meet it almost immediately, and the net position does not change as much as it should. The step-up SIP places a claim on your future income before your future self has a chance to spend it.
This is the same principle behind the Dabba System: the allocation is decided before the money arrives in the spending account, not after. Applied to investing, it is one of the most quietly powerful habits available.
Most major investment platforms in India today allow you to set up an automatic annual step-up when you create a new SIP. You choose the percentage, and the platform increases the investment automatically on the anniversary date without requiring any further action. If you have an existing SIP that does not have this feature, the approach is straightforward. On the first of April each year, the beginning of the financial year, increase your SIP manually by ten percent. It takes five minutes. Over twenty years, those five minutes, repeated annually, can add crores to your outcome.
ALSO READ- Paisa Aur Hum: Why Nobody Ever Taught Us How to Actually Feel About Money
If you started a SIP recently and have not yet thought about stepping it up, the best time to build this habit is now, before the original amount becomes completely comfortable. Comfort in investing, as in most things, is a signal worth questioning.
This week, check your SIP amount, calculate ten percent, and either activate the step-up feature on your platform or set a reminder for April first to do it manually.
The SIP you started was the decision that mattered most. The step-up is simply the decision to honour it every year.
Write to us at iamolaxmi@gmail.com. We read every letter.