DOSIP – This one word that can set you free financially to ensure you land in the world of financial ecstasy. We will take you through a journey of savings, investment and what sense it makes to keep making those small investments only to reach many milestones in life. You can be born poor, it is not your mistake but if you die poor then it is entirely your blunder. Similarly, you can be young and without money but you can’t be old without it.
The genesis of SIP Story
I’m starting the SIP journey symbolically from the peninsular point called ‘Cape Comorin’ (Kanyakumari) up all the way to Kashmir (“K2K journey” we call it) to hand hold the investors about what simple things they need to do to be successful financially (without even becoming a businessman or a politician !) by just making their money work harder.
Kanyakumari is the southern tip of India that boasts of enshrines of Devi Kanyakumari (protector of the country), the Vivekananda rock (place of enlightenment), Gandhi memorial (enthralls you about human persistence and sacrifice). All these symbolic augurs well for our SIP culture and hence I chose to start my journey here. Let’s begin the day. The only place where we can see the sunrise and sunset at the same place. Also, it will be interesting to note that one can enjoy the spectacle of sunset and the full moon rising on the same horizon.
The motto of this site “Save for the future to save your future”
Start point: SIP- Stop, Introspect and Proceed
Every breadwinner in a family will strive to earn enough for the present life. He is pre-occupied with so many priorities in life that he loses the count of the pending issues. Present day man knows that he has to save. He becomes desperate and ends up doing something that is not adequate. He needs to overcome these challenges
The investor needs to understand that the money he earns has to be segregated for various purposes. All the money that he earns does not belong to the current period. They need to monetize their income into ‘Present Money’ and ‘Future Money’.
For every Rs.100 earned per month, they need to segregate it as
- Primary needs such as Rent/EMI, household expenses and taxes
- Secondary needs such as retirement and family goals (education, marriage, etc)
- Finally for lifestyle expenses.
Your primary and Secondary Budgeting: For every Rs.100 you earn, please keep aside 25% towards future goals. You can start with a smaller allocation and do a catch-up before you reach 35 years of age, otherwise, you might have extended work-life!
Nature of Expenses Expense Head Time Zone
Primary Rent / EMI Present
Primary Household Present
Primary Taxes Present
Secondary Family Goals Immediate Future
Secondary Retirement Fund Future
Tertiary Lifestyle Expenses Present
Tertiary Misc Expenses Present
Quantum of Right Decision
To set aside some money alone is not sufficient. You need to save the right amount in the right asset. The key point to remember is “How much time you give to your investment is a key determinant to success and also defines your risk”
For example, debt or bond can be risky if your time horizon is 3-6 months but ideal for 1-2 years. Similarly, large-cap stocks or fund can be riskier for 2-3 years but ideal for 7-10 years. The investor needs to set a fair expectation of ‘rate of return’ and ‘investment horizon’ to get an optimum return