Systematic Investment Plans (SIPs) are frequently regarded as an effective method for wealth accumulation, as demonstrated by Harsh Jain from Mumbai. His disciplined and goal-focused approach exemplifies how such strategies can lead to long-term financial success. Jain shared his investment journey on a recent episode of The Money Show on ET Now, seeking expert guidance on achieving three significant life goals.
His story emphasizes not just financial figures but also the importance of vision, discipline, and making sound financial decisions early. Jain is part of an increasing group of urban Indians utilizing mutual funds and SIPs to build wealth over the long term.
Jain has outlined three major financial objectives that resonate with many families in India. He aims to save Rs 1 crore for his daughter’s higher education over the next twelve years, set aside Rs 75 lakh for her wedding in twenty years, and accumulate a retirement corpus of Rs 2 crore for himself within the same timeframe, planning to retire by age 57.
These aspirations are common among middle-income families who dream of providing quality education, hosting a memorable wedding, and ensuring a comfortable retirement. What distinguishes Jain is his proactive strategy to realize these dreams. Currently, he invests Rs 40,000 monthly through SIPs in four mutual funds. These include two flexi-cap funds—Parag Parikh Flexi Cap and HDFC Flexi Cap—along with the Tata Small Cap Fund and a Motilal Oswal fund. In addition to his SIPs, he has invested Rs 1.5 lakh in both JM Flexicap and Quant Large Cap funds as lump sums.
Jain’s portfolio is valued at Rs 14 lakh, and he plans to bolster his monthly SIP by Rs 15,000 starting in April 2025.
While Jain has made significant progress, he sought validation and advice from Anil Rego, Founder and CEO of Right Horizons. Rego affirmed Jain’s approach but also offered crucial insights. He noted that Jain’s goals for his daughter’s education and marriage are attainable if he continues his SIPs consistently with the added Rs 15,000.
However, Rego cautioned against underestimating inflation’s impact, particularly on long-term goals like retirement. A Rs 2 crore corpus may seem adequate today, but its real value could significantly decrease after two decades due to inflation.
To counter this, Rego advised Jain to maintain his commitment to increasing his SIPs, and possibly further augment them as his income grows, to build a more resilient portfolio against rising costs.
Rego also addressed fund selection, suggesting that Jain’s portfolio could be simplified. He recommended replacing the Quant Large Cap Fund with more effective options and consolidating into strong performers like Parag Parikh Flexi Cap and HDFC Flexi Cap, while considering adding ICICI Prudential Bluechip Fund.
This advice underscores a common investing principle: a streamlined portfolio of high-quality funds is preferable to a cluttered one. Overly diversified portfolios can become challenging to manage and distract focus. Instead, consistently performing funds should be prioritized over chasing the latest trends.
Jain’s experience highlights the enduring effectiveness of SIPs. These investments, much like nurturing a growing tree, involve regular contributions that compound over time, fostered by market growth and rupee cost averaging.
Investors may become anxious during market downturns, but those who remain steady, as Jain plans to, often benefit in the long term. SIPs focus on time in the market, rather than timing the market.
Jain’s case serves as both an inspiration and a lesson. With clear goals, disciplined investing, and openness to expert counsel, he is creating a path toward financial independence. These principles—starting early, staying consistent, investing purposefully, and periodically reviewing one’s approach—can guide anyone seeking financial security.
Reaching a financial goal of Rs 3-4 crores may not occur quickly, but with perseverance and the right mindset, it is attainable.
Disclaimer: The views and opinions presented by experts are their own and do not reflect those of the Economic Times.
