Are you investing enough to secure your future? It is the question that keeps most of us awake at night.
While everyone talks about the magic of compounding, few people discuss the mechanics. How much of your salary should actually go into a Systematic Investment Plan (SIP)? Does the strategy change when you turn 30 or 40?
At Wealth Nerve, we believe financial freedom isn’t about luck; it’s about math and discipline. This guide is your roadmap to navigating SIPs at every stage of life, complete with sample portfolios and tools to help you start today.
Why SIP Wins the “Money Game”
Before we look at how much, let’s remember why. A SIP allows you to invest small amounts regularly (usually monthly) into mutual funds. It eliminates the need to time the market.
- Rupee Cost Averaging: You buy more units when the market is low and fewer when it is high. Over time, this lowers your average cost of buying.
- Discipline: It forces you to save before you spend.
- The 8th Wonder: Compounding works best when you give it time. A ₹5,000 SIP started at age 25 can create significantly more wealth than a ₹15,000 SIP started at age 40.
The Roadmap: How Much to Invest at Every Age
Your risk appetite and financial responsibilities change as you age. Your SIP strategy must evolve with you.
1. The Roaring 20s: The Aggressive Phase
Goal: Capital Creation
Strategy: Maximum Risk, Maximum Growth.
In your 20s, your biggest asset is time. You have few dependents and a long runway before retirement.
- Recommended SIP Amount: At least 20% to 30% of your in-hand income.
- Where to Invest: Focus on Small-Cap and Mid-Cap funds. These are volatile in the short term but historically offer the highest returns over 10+ years.
2. The Thriving 30s: The Balancing Act
Goal: Wealth Accumulation & Tax Saving
Strategy: Growth with Stability.
You might be getting married, buying a home, or planning for children. Expenses rise, but so does your income.
- Recommended SIP Amount: 20% of income (Try to increase SIP amount by 10% every year).
- Where to Invest: Flexi-Cap funds and Large-Cap funds. Start adding Gold or Debt funds to stabilize the portfolio.
3. The Focus 40s: The Catch-Up Phase
Goal: Goal-Based Investing (Kids’ Education, Retirement)
Strategy: Balanced Growth.
You are likely at your peak earning potential. You cannot afford to lose capital now, but you still need to beat inflation.
- Recommended SIP Amount: 30% to 40% of income. (As loans get paid off, divert EMIs to SIPs).
- Where to Invest: Large-Cap Index Funds and Aggressive Hybrid Funds.
4. The Secure 50s: The Preservation Phase
Goal: Capital Protection & Income Generation
Strategy: Low Risk.
Retirement is around the corner. It’s time to move money from high-risk equity to safer avenues.
- Recommended SIP Amount: Whatever surplus you have.
- Where to Invest: Balanced Advantage Funds, Debt Mutual Funds, and Corporate Bonds.
The Great Debate: SIP vs. Lump Sum
We often get asked at Wealth Nerve: “I got a bonus. Should I invest it all at once or do a SIP?”
Here is the cheat sheet:
| Feature | SIP (Systematic Investment Plan) | Lump Sum (One-time Investment) |
| Best For | Salaried employees with monthly cash flow. | People with bonuses, inheritance, or property sale gains. |
| Market Timing | Not required. | Risky. If you invest at a market peak, returns suffer. |
| Risk Level | Lower (due to averaging). | Higher (immediate exposure). |
| Psychology | “Set it and forget it.” | Can cause anxiety if markets drop immediately after investing. |
The Wealth Nerve Verdict:
If you have a large sum (e.g., ₹5 Lakhs), do not dump it all in at once. Put it in a Liquid Fund and use an STP (Systematic Transfer Plan) to move it into equity over 6–12 months. This gives you the safety of a lump sum with the benefits of a SIP.
Sample Portfolios for 2025
If you have ₹10,000 to invest monthly, here is how you might split it based on your profile:
The “Young Gun” (High Risk)
- Small Cap Fund: ₹4,000
- Mid Cap Fund: ₹3,000
- Flexi Cap Fund: ₹3,000
- Target Return: 14-16%
The “Balanced Builder” (Moderate Risk)
- Flexi Cap Fund: ₹5,000
- Large Cap Index Fund: ₹3,000
- Gold/Debt Fund: ₹2,000
- Target Return: 11-13%
The “Safety First” (Low Risk)
- Balanced Advantage Fund: ₹4,000
- Large Cap Fund: ₹3,000
- Corporate Bond Fund: ₹3,000
- Target Return: 8-10%
Calculate Your Future Wealth
Stop guessing. Use the Wealth Nerve SIP Calculator below to see how small investments today turn into massive wealth tomorrow.
Now that you know your strategy, let’s see how much wealth you can actually build.
Final Thoughts
The best time to plant a tree was 20 years ago. The second best time is now. It doesn’t matter if you start with ₹500 or ₹50,000—the key is to start.
💡 A Note on Inflation: Seeing “₹1 Crore” in the calculator looks amazing. But remember, inflation eats into the value of money. If inflation is 6%, ₹1 Crore twenty years from now will have the purchasing power of approximately ₹31 Lakhs today. Pro Tip: Always aim for a target amount higher than what you think you need.
Check out our other tools on Wealth Nerve to backtest your portfolio and optimize your finances.
Frequently Asked Questions
1. Can I skip a month of SIP? Yes. Most platforms allow you to “pause” a SIP. However, try to avoid this as it breaks the compounding chain.
2. Which date is best for SIP? Historically, there is no “lucky date.” Whether you invest on the 1st or the 25th, the difference over 10 years is negligible. Pick a date 2 days after your salary credit date so the money leaves your account before you can spend it.
3. Is SIP safe? SIP is just a method of investing. The safety depends on the fund you choose. Equity funds carry market risk, while liquid funds are safer.