SIP for Salaried Individuals
Definition
For salaried individuals, SIP is the most natural and effective investment method because it aligns perfectly with the regular monthly income cycle. By automating investments through auto-debit immediately after salary credit, salaried investors can build significant wealth over their working years.
In Simple Words
As a salaried person, your biggest advantage is predictable monthly income. SIP leverages this by automatically investing a portion of your salary before you can spend it. The ideal approach is: Salary credited → SIP auto-debited (within 2-3 days) → Remaining amount for expenses. This "pay yourself first" strategy ensures consistent investing.
Real-Life Scenario
Kavita, a 28-year-old marketing manager earning ₹75,000/month, structures her SIP portfolio: 1. ELSS Fund SIP: ₹5,000/month (tax saving under 80C) 2. Large Cap Fund SIP: ₹8,000/month (stability) 3. Flexi Cap Fund SIP: ₹5,000/month (growth) 4. International Fund SIP: ₹2,000/month (diversification) Total: ₹20,000/month (27% of salary) She sets auto-debit on the 3rd of every month (salary on 1st). In 25 years, at 12% average return, her portfolio could grow to approximately ₹3.80 Crore — from a total investment of just ₹60 Lakhs.
Key Points to Remember
Frequently Asked Questions
Test Your Knowledge
1 questions to check your understanding
What is the ideal approach for setting SIP auto-debit for salaried investors?
Summary Notes
Salaried individuals have the most natural advantage for SIP
Automate everything — SIP should happen before discretionary spending
Use salary hikes to increase SIP, not just lifestyle
ELSS SIP provides dual benefit: wealth creation + tax saving
Think of SIP as a non-negotiable monthly expense, not optional