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Tired of not knowing where and how to invest your money for the future?
The ideal investment option that guarantees potential profit over a long time is mutual funds.
Over the years, mutual funds have given robust profits to investors.
When it comes to investing in mutual funds, many people wonder what would be the best way to start investing.
The two popular mutual fund investment strategies are SIP (Systematic Investment Plan) and Lumpsum investment.
Whether you’re a seasoned investor or a beginner, the debate between Systematic Investment Plan (SIP) and Lumpsum investments is likely to have crossed your mind.
Each of these investment strategies offers a unique way to accumulate wealth. Both approaches have their advantages and are suitable for different financial goals and risk appetites.
To make an informed choice, it’s crucial to consider factors such as your income, financial objectives, market conditions, and risk tolerance.
Understanding the distinction between lump sum and SIP investments is essential to choosing the best investment option.
In this guide, we’ll delve deeper into SIPs and lumpsum investments, compare their features, and help you identify which strategy aligns best with your financial goals.
By the end, you will have a better understanding of what strategy works best for you and how to effectively grow your wealth through mutual fund investments.
The dilemma of choosing SIP or lump sum in mutual funds is common and debatable.
When deciding between these two investment methods, you must first understand the dynamics of your financial situation as well as the landscape of both investment plans.
SIP encourages disciplined investing through smaller, more regular contributions, making it ideal for those with consistent income and long-term financial objectives.
Lumpsum investments, on the other hand, are one-time, large sums that can yield higher returns if invested at the right time in a bullish market.
Let us look at the concepts behind these two investments, as well as their features, key differences, benefits, and other considerations, so you can make an informed decision about which is best for you.
SIP, also known as a Systematic Investment Plan is a disciplined investment approach where you invest a fixed amount in a mutual fund plan at regular intervals—weekly, monthly, or quarterly.
This systematic investment method is ideal for those who are earning a regular income and looking to broaden their wealth over time. This method is popular among youngsters because SIPs can be started small and gradually built in a planned manner over a longer horizon.
SIPs are available in a variety of types to meet the personal needs of investors. Some of the popular SIP plans are given below:
SIP promotes a more discretionary approach to investment. If you are a first-time investor, SIP plans are the ideal ones for you, as they do not require a deeper understanding of markets.
You are only required to invest a small amount from your pocket every month without risking your entire income in one investment.
SIPs are low-risk, ideal for you with your long-term financial goals that might help to accumulate wealth over time to achieve the financial objectives.
If you are someone with a regular or irregular income, SIP offers the flexibility to choose the contribution amount, making it convenient for you to invest any amount you want.
A lump-sum investment is the practice of investing a large amount of money in a mutual fund plan in one go. In this investment, you need a large upfront amount to be invested at the beginning of the investment plan, without any additional payment.
This investment plan requires knowledge of market situations, as it reaps profits only when a unit is at its lowest point and expected to go up.
If you have market knowledge and a substantial amount of funds, then you should choose a lump-sum investment, especially during market downturns, to capitalise on potential price appreciation.
Lump-sum investments are ideal for long-term investment goals, as the large amount has the potential to grow exponentially over time as the market improves.
This mutual fund investment plan is more convenient than others as it requires only one-time transactions to maximise the market opportunities and generate returns with compounding.
Moreover, you will have the flexibility to strategically allocate your funds across multiple assets and securities to build a diverse investment portfolio.
| SIP | Lump sum | |
|---|---|---|
| Investment style | Regular, smaller investments over time. | One large investment at one go. |
| Risk tolerance | Lower risk as it balances the market fluctuation with the rupee cost average. | Higher risk due to full exposure to market volatility. |
| Market conditions | Good for volatile markets. | Ideal for bull markets. |
| Flexibility | More flexible | Less flexible |
| Impact of discipline | Promotes regular and disciplined investment habits. | No impact on discipline after initial investment. |
| Potential returns | High potential returns with market timing. | Average returns over the long term. |
Both lump sum and systematic mutual fund investments are subject to market risk. Therefore, you should gain a deeper understanding of mutual funds or consult a financial advisor.
As you have completed reading this article, you now know the difference between SIP and lumpsum investment strategies.
These two strategies come down to your financial goals, risk tolerance, and investment horizon.
If you’re someone who prefers consistent, smaller investments and wants to reduce the impact of market volatility, SIP is the better choice. It allows you to invest regularly, making it ideal for long-term wealth creation with lower risk.
On the other hand, if you have a significant lump sum available and can time the market effectively, a lump sum investment can potentially offer higher returns, especially in a favourable market.
However, it also exposes you to more risk as the entire amount is invested at once.
In the end, choosing the right mutual fund strategy should be determined by understanding your financial capital, risk tolerance, and investment goals.
By understanding the difference between SIP and lumpsum, you can make a more informed decision and choose the strategy that best suits your investment objectives.
Disclaimer: The information provided in this blog is for educational and informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Readers are encouraged to do their own research and consult with a licensed financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses or damages incurred from following the information provided in this blog.
Hashim Manikfan
Hashim Manikfan is a professional financial content writer with extensive experience in creating engaging and informative articles on a wide range of financial topics. With academic background in Communication and Journalism, Hashim has published numerous articles aimed at educating readers on essential financial principles. His work covers areas such as financial markets, investment strategies, economic trends, and more. His writing style ensures complex topics are accessible and interesting, making financial literacy attainable for a broad audience.
The phrase Money is not everything, but everything needs money is true.
Let me show you an example of how money is universal in everything you do.
Imagine your life is a car, and the different gears are education, health, happiness, financial freedom, love, and many others.
In the car, the gearbox helps to transmit power to different gears. But in life, money helps to maintain these gears at their best.
So without money, struggles can be overwhelming. And your life will be stuck in survival mode.
At times, insufficient money can even jeopardise these foundations of life.
Indeed, money is not everything in life, as other things such as love, friendships, and health are also important. But money is necessary.
Whether you want to celebrate an occasion with your family by going out, cooking at home, or a vacation with friends, money plays a crucial role in making them happen, even when the experiences with your family and friends are more important than money.
Money is a universal document with the same purpose: to keep the wheels running.
Since money plays a crucial role in building other gears in life, shouldn’t we find out why it is that important?
Let’s find out why money is important in our lives and also why it is not the key to happiness.
In the modern world, money is not just a medium of exchange; it is a universal language everyone is familiar with. If you go to any corner of the world, money talks.
We may not realise how money influences our experiences because it is a silent engine that makes life better.
Imagine, education? Needs money. Better healthcare? Needs money. Achieving a dream? Needs money. In one way or another, money opens doors to accessing these.
Money might not be able to purchase peace, love, or happiness. Right?
However, money can help you get rid of the ongoing struggle to make ends meet and ease your financial worries.
Money brings financial stability, security, and the freedom to pursue other interests without any worries.
If you are earning sufficient money. Then you will have the time to cherish other things in your life.
But if you don’t, you will be constantly worried about how to make it in order to provide for and protect your family and loved ones.
Money is so powerful that it can make you feel like money is everything in life. It can even influence you to think that money is more important than love and other principles of life.
But do you believe that money is more significant than love? And is money the most supreme factor in life?
If you do, then you are in serious trouble.
Let me tell you that money has two faces. And money is not everything in life.
While money provides financial security and stability, having only money and no other things, such as love or friendship, can leave you lonely, dissatisfied, materially possessed, and empty.
You will only realise this if you are blinded by money.
You don’t want to live your life solitary in a big house with a pool of money and no one to share your thoughts or experiences with. Right?
If yes, then the key to a healthy life is striking a balance between money and other principles in life.
Keep reading to find out how to find the balance.
Having huge wealth doesn’t mean you are rich if you do not have the means to cherish your wealth. Healthy relationships, work-life balance, family, and feeling fulfilled are the real wealth of life. While money can blind you from achieving these important things in life, it is crucial to find the right balance between them.
Here is a detailed guide on how to find the right balance.
Identify what truly matters to you. It could be anything from families, relationships, travel, or career. Making a list of things will help you determine their value and rank them. Prioritise what is important to you and contribute time, energy, and resources to build a connection.
Determine financial goals that align with your life goals. If your life goals involve spending time with your loved ones or vacationing with friends, then prioritise saving money for spending time with them.
Ensure that you prioritise achieving these goals as you earn consistently. Specifying a budget that spends money for meaningful purposes will help you achieve meaningful dreams.
When you have enough, you may not need other people’s help to do things. But that doesn’t mean that you cut off people from your life just because they are not needed financially.
No matter how much wealth you accumulate, surround yourself with people who care about you. Share the moments with those who matters to you.
Strong relationships offer emotional support, companionship, and shared joy, which money cannot provide.
Give importance to your health. As we grow older, our health gets deterred. Even if you have a fortune of wealth, if you do not have the health to spend this fortune, then what is the point of having a fortune?
Therefore, prioritise your healthcare from an early age. Spend your money and time on healthy diets, getting proper sleep, and living in clean environments. Practice stress-relief activities like yoga, exercising, or medication.
Check your health by conducting medical tests to prevent any possible expensive medical issues later. Prioritise living a healthy life while pursuing financial success.
Invest your time and money in experiences rather than in materials. Different experiences open doors for new opportunities as well as create memories and enhance personal growth.
Experiences enrich your life, learning new things that broaden your perspective. It is more rewarding than possessing materials, as it encourages emotional well-being.
In the journey of life, money isn’t everything, but everything needs money to keep moving forward.
While money serves as a powerful tool for achieving financial security, accessing opportunities, and improving quality of life, it is not the sole factor that determines happiness or fulfilment.
True richness lies in balancing wealth with meaningful relationships, good health, personal growth, and memorable experiences.
Neglecting other aspects of life in pursuit of wealth can lead to loneliness and dissatisfaction, no matter how much money you accumulate.
On the other hand, living without financial stability can overshadow life’s joys with constant worry. The key is to strike a balance to have an enriching life.
Ultimately, by aligning financial goals with personal values and nurturing what truly matters, prioritising relationships and health, you can create a life that is not only prosperous but also deeply fulfilling.
Disclaimer: The information provided in this blog is for educational and informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Readers are encouraged to do their own research and consult with a licensed financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses or damages incurred from following the information provided in this blog.
Hashim Manikfan
Hashim Manikfan is a professional financial content writer with extensive experience in creating engaging and informative articles on a wide range of financial topics. With academic background in Communication and Journalism, Hashim has published numerous articles aimed at educating readers on essential financial principles. His work covers areas such as financial markets, investment strategies, economic trends, and more. His writing style ensures complex topics are accessible and interesting, making financial literacy attainable for a broad audience.
Are you an intern or someone with a low income who is struggling to save money with a 10000 salary?
Well, you are not alone.
There are millions of others like you.
Everyone will tell you to save money every month, but they will not tell you how, even when they know you have a limited budget.
But I can understand what you are going through.
Because I was in the same state when I started my professional career, struggling to understand how anyone can save with an income as low as ₹15000.
But I managed to do so.
Let me tell you, it is not easy. But all your sacrifices will be worth it.
You might be struggling to understand how to save money from a low income.
Then you are at the right place.
Today, I would like to discuss how anyone can save for the future with a low-income salary.
Even if you have multiple financial responsibilities and goals, I can guarantee you that following a strategic plan like I did can help you improve your financial situation and save for the future.
Let us find out what you need to do to save money with a low income.
Saving with low income is not everybody’s cup of tea.
It requires sheer dedication and willpower to minimise your cost and live in a budget-friendly environment.
There are lots of people who struggle to follow a detailed budget plan and fail to save every month.
You do not want to be like them. Right?
Here is a detailed overview of a strategic approach to saving money with 10000 salary.
Let me explain each of these approaches in detail to have a better understanding.
Set realistic financial goals that align with your income and expenses. Think of both short-term goals, such as buying a smartphone, and long-term goals, like saving for a house or higher education. Break each goal into achievable steps and timelines. Let us break down the goals:
Visualize your goals regularly to stay motivated. Write them down and review them periodically to track your progress. Remember, clear and well-defined goals give your savings plan direction and purpose.
Make a detailed budget that clearly states your income and how it will be allocated. Divide your income into necessary categories, such as rent, utilities, groceries, and savings. Don’t forget to include irregular expenses like festivals, travel, or medical emergencies.
Consider using the 50/30/20 rule—allocate 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment. Use budgeting tools or apps to simplify the process and keep track of your expenses effectively.
If your expenses exceed your income, consider finding ways to increase your earnings. Increasing your income through a secondary or passive income may help you support your financial needs. Some of the ways to increase your income are given below
Even small additional income streams, like selling unused items or monetising hobbies, can make a significant difference in your financial stability.
When your salary gets credited, treat your savings like a non-negotiable expense. Automate your savings by setting up standing instructions to transfer a fixed amount to your savings account or investment plan.
Establish an emergency fund that covers at least 3-6 months of essential expenses to protect yourself from unexpected financial setbacks. This will ensure that your savings goals remain unaffected by emergencies.
Identify and eliminate unnecessary expenses by distinguishing between needs and wants. Cut back on unwanted expenses to meet your financial needs. Find out which are the possible expenses that you can cut without compromising your standard lifestyle.
Adopt minimalist habits to simplify your lifestyle and reduce spending.
Review your budget regularly—weekly or monthly—to ensure you’re staying on track. If your spending exceeds your predetermined amount, identify the categories causing the overspend and make necessary adjustments.
Analyse your spending patterns and look for areas to optimise further. Regularly monitoring your budget will also help you spot and eliminate small, unnoticed expenses that can add up over time.
Cultivate habits that help you spend wisely and save more. Plan your shopping trips with a list to avoid impulsive purchases. Compare prices online and in stores to find the best deals.
Always find room for improvement. Identify where you lack and ensure to improve. Update your financial knowledge with the growing financial landscape.
Leverage your abilities by understanding various new financial strategies and concepts by enrolling in financial courses that specialise in specific topics. You can also check out various financial literacy courses offered at FinQuo Versity App. Specify what you need to learn and improve. This will help you to save your time.
Attend webinars conducted by professionals. Make a note of the key points and take notes. Be engaging and maintain communication with others to learn from them.
A disciplined strategy like this can help you save consistently every month from a ₹10,000 salary. It is critical to be thorough and committed to the strategy.
If you’re looking to grow wealth on a low income, investment can be a game-changer for you.
While you lay the foundation by saving for financial security, combining it with strategic investments can accelerate your journey toward building wealth.
However, let’s face it.
Investing with a limited income, like ₹10,000 a month, is not as easy as you think. It requires discipline, careful planning, and a willingness to start small.
You might think investing just ₹500 or ₹1,000 a month won’t make much of a difference.
But let me assure you,
The magic of compounding effects can turn even small, consistent contributions into mammoth returns over time. It’s not about how much you start with; it’s about consistency and patience.
If you’re curious about the best investment options for low-income earners, explore the investment options given below.
These options can help you make the most of your money and pave the way for long-term financial growth.
The Public Provident Fund is an ideal investment option for those with lower incomes. This investment plan can generate long-term benefits by just investing as little as ₹500, up to ₹1.5 lakh annually.
This investment plan has a lock-in period of 15 years with an option to extend in 5-year blocks. Therefore, you can choose this option if you’re considering it for the long term.
Furthermore, most PPFs are government-backed and can earn between 7% and 8% per year. It is low-risk and provides moderate returns.
A unit-linked insurance plan, or ULIP, is a dual-benefit investment plan that offers market-linked investments and life insurance coverage.
In this investment plan, you have the option to select favourable market investment options such as equity, debt, hybrid, and index funds.
You can start investing in these with just ₹1,000 and gradually increase the amount. The minimum period required for this investment is 5 years.
Longer durations, however, yield higher returns. Upon maturity, investors can receive the payouts, which will be tax-free under Section 10(10D).
Direct stock investment is a highly rewarding investment, but it comes with certain risks. Long-term investments in stocks are considered profitable.
When you invest in stocks, you need to research every detail about the relevant company.
Use well-established brokerage platforms to start the stock market investment. Look for no or minimal commission to save on transaction costs
Begin with established companies (blue-chip stocks) for stability or explore dividend-paying stocks for passive income.
Diversify your capital into various stocks to manage risks associated with the market conditions
Research and analyse company fundamentals, financial health, and market trends. Review and regulate your stocks as per the performance of the assets.
Manage and regulate the stock market investments, considering the latest updates and market conditions.
A recurring deposit is a type of saving and investment where you deposit a fixed amount of sum every month with a return of interest from 6% to 9%.
In this plan, you have the flexibility to choose the amount you wish to invest and the tenure.
This will help you to make a considerable amount of money within the predetermined period.
You can easily start a recurring deposit account by filling out the application form in any bank, office, or financial institution.
Submit the necessary documents and start your RD by making the first deposit.
Fixed deposits are a type of investment where you will invest a large amount for a specific time period at a predetermined interest rate.
Fixed deposit plans are regularly offered by banks or financial institutions.
The amount deposited into the fixed deposit is subject to earning interest at a fixed rate. The interest rates vary between 6% and 7.8%
You can increase your earnings by holding a fixed deposit account for a longer period, which earns a higher interest rate.
There are multiple types of fixed deposits catered to the different needs of investors; some of the popular ones are standard fixed deposits, tax savings, senior citizen, and Flexi.
You can choose any type of fixed deposit account that aligns with your financial health.
Mutual funds are a type of stock market investment. Here, people invest a specific amount in a pool of money. This fund is managed by professionals.
A fund manager will invest your money into a pool of assets after considering the potential growth opportunity.
Mutual funds are specifically designed for those who have no time to learn about the stock market, beginners, as well as for experts.
You can save some amount of money from your income to invest in mutual funds. Start with Systematic Investment Plans (SIPs) as low as ₹500.
Mutual fund options are available online and through banks as well. However, mutual funds are subjected to market risks. So it is crucial to understand the risk involved while investing in mutual funds.
There is a diverse selection of mutual funds with various risk ratios. Choose a plan that aligns with your goals and your risk tolerance.
Common mutual funds are equity mutual funds, debt mutual funds, hybrid mutual funds, and many others.
You can open a mutual fund in any type of account that caters to your needs and financial condition.
You do not need any introduction to gold. Gold is infamous for its demand and growth.
The price of gold in India has increased by about 90% in the last five years.
If you have invested a significant amount in gold, then you would not be here now.
You can still invest in the cold considering its historical price data and its potential. Investing in gold includes physical gold, gold ETFs, digital gold, gold mining stocks, gold futures and options, and gold mutual funds. You can choose to invest in any way you would like to.
In context to this, there are other investment options, such as retirement plans, cryptocurrencies, real estate, and many others. You should learn about more investing options if you want to invest.
A better understanding of specific investment plans can help you use your skills to make informed decisions.
Starting your career with a modest income and saving money with a 10000 salary can make you feel financially concerned.
Managing expenses, avoiding impulsive purchases, and planning for the future might seem impossible—but it’s not about how much you earn; it’s about how wisely you manage it.
By setting clear goals, creating a budget, and sticking to it, you can take control of your finances. Even small investments, like ₹500 a month, can grow significantly over time.
Cutting unnecessary expenses and adopting smart spending habits may require sacrifices, but these will pay off in the long run.
It’s not easy, but every small step you take today will bring you closer to financial stability. Stay disciplined, stay focused, and remember—your future self will thank you for the effort you put in now.
Disclaimer: The information provided in this blog is for educational and informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Readers are encouraged to do their own research and consult with a licensed financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses or damages incurred from following the information provided in this blog.
Hashim Manikfan
Hashim Manikfan is a professional financial content writer with extensive experience in creating engaging and informative articles on a wide range of financial topics. With academic background in Communication and Journalism, Hashim has published numerous articles aimed at educating readers on essential financial principles. His work covers areas such as financial markets, investment strategies, economic trends, and more. His writing style ensures complex topics are accessible and interesting, making financial literacy attainable for a broad audience.
