mutual fund

Every year thousands of employed people stop their SIP (mutual fund installments) midway. Common reasons are Diwali shopping, wedding expenses, pressure of EMI on buying a new house. In such a situation, stopping the SIP of ₹ 20,000 for a few months seems trivial, because it seems that there is only a delay of ₹ 40,000-₹ 60,000, not a loss.

But the truth is that the impact of stopping SIP is huge. A small interruption today can turn into a loss of ₹50 lakh, ₹1 crore or even more in 2030. The reason is compounding. Compounding doesn't care about your compulsion, it just needs time. The most dangerous thing is that people do not calculate this hidden loss. Stopping SIP seems like the right decision, until we see how big the same money could have become in the future.

Every missed SIP causes loss

Every month's SIP is a new investment. If you skip one month's installment, that money does not get a chance to grow for 2030 years. If you do SIP of ₹ 20,000 every month for 30 years and get an average return of 12%, then a fund of about ₹ 7 crore can be created. But if SIP is stopped for just 3 months every year, the final fund may reduce to around ₹5 crore. That means a loss of about ₹ 1.52 crore.

Compounding looks at time, not emotions.

People think that they will make up the shortfall by investing more later, but it is not easy to do so. The time that is gone does not come back. The sooner and more consistently you invest, the more you will benefit.

Emotional Spending vs. Financial Discipline

Weddings, festivals, social pressure all increase expenses. Just stopping SIP for a month sounds easy, but this habit causes huge loss in the long run. Even missing just one SIP in a year can reduce your funds by 2030%.

Inflation further increases the losses

Not doing SIP not only reduces returns but also increases the impact of inflation. The ₹20,000 that you do not invest today also reduces your buying power in the future.

Small obstacles add up to big loss

If a SIP of ₹15,000 continues for 30 years, then around ₹5.3 crore can be earned. But if some SIPs are missed in between, the fund may reduce to ₹4050 lakh. Whereas the missed amount will be only ₹ 12 lakh.

How to continue SIP without stopping life expenses

You don't need to miss festivals, weddings or EMIs. Just give priority to SIP. Plan in advance for big expenses. Put SIP on auto-debit. Create an emergency fund. If there is problem then reduce SIP a little, do not stop it. Because stopping SIP completely is more harmful than starting it again later.