On a frigid January morning, Manav was at his favourite tea stall, enjoying a steaming cup of cutting chai. His phone buzzed with social media notifications about Dry January.
Dry January is a public health campaign, an initiative of UK-based charity ‘Alcohol Change UK’, which was launched in 2013. This campaign encourages people to abstain from alcohol for the entire month of January so as to promote healthier drinking habits, raise awareness about alcohol’s effects, and help participants reset their relationship with alcohol after the festive season. Many find it beneficial for their physical health, mental clarity, and financial savings.
Manav’s friends were talking about ditching alcohol to focus on health and discipline. Manav smirked. “Dry January? My life’s dry enough already with work deadlines and EMIs,” he muttered.
But one post caught his eye: “Dry January isn’t just about health; it’s about discipline. Are you disciplined with your money?” That phrase stayed in his mind, when he remembered the SIPs (Systematic Investment Plans) he had started last year but had paused during the festive season. He hadn’t restarted them yet.
Later that day, to calm down these thoughts about paused SIPs, he called Rugma, his financial advisor. “Rugma, I’ve been thinking about my investments. I paused my SIPs during Diwali, and now I’m wondering if it really makes a difference if I restart them later.”
Rugma chuckled. “Manav, I’m glad you brought this up. Let me show you why staying consistent with your mutual fund investments is just as important as maintaining discipline in other areas of life.”
The Time Value of Money: Start Early, Stay Consistent
Rugma explained, “Imagine: You start a ₹5,000 SIP at 25 in an equity mutual fund with an average return of 12% per year. By the time you’re 45, you’ll have ₹50.45 lakh. Now, if you wait 5 years and start at 30, your corpus at 45 will be ₹27.63 lakh. That’s a difference of ₹22.82 lakh!”
Manav’s jaw dropped. “I lose ₹22 lakh just by waiting 5 years?”
“Like that,” Rugma said. “This is the power of compounding. Your money grows exponentially over time. By stopping or delaying your SIPs, you disrupt that growth. It’s like when skipping gym sessions, you lose momentum and progress.”
Choosing the Right Mutual Funds
Manav asked if his SIPs were in the right funds. Rugma explained you should invest considering your investment goals, for instance:
1. For Long-Term Goals (10+ years)
You may choose equity mutual funds such as Nifty 50 Index Funds, Flexi-Cap Funds, etc. These funds focus on long-term growth and have historically delivered returns of 10-12% annually. IDBI Nifty 50 Index Growth Direct Plan available on Kuvera has given a 12.6% annual return in the past 5 years. A ₹5,000 SIP in a Nifty 50 Index Fund for 10 years could grow to ₹11 lakh (at a 12% annual return).
2. For Medium-Term Goals (5-10 years)
You may select a Hybrid Fund such as Balanced Advantage Funds, as these funds balance equity and debt, offering moderate returns with lower risk. For example, HDFC Balanced Advantage Growth Direct Plan has provided an average return of 20.1% over the past 5 years.
3. For Short-Term Goals (1-5 years)
Debt funds (e.g., Liquid Funds, Short-Term Bond Funds) are safer options for short-term needs, providing better returns than a savings account. For example, a ₹5 lakh lump sum in a liquid fund could grow to ₹5.25 lakh in a year (at a 5% annual return).
Procrastination Costs More Than You Think
Rugma continued, “One of my clients, Priya, started her SIPs at ₹3,000 monthly in 2018. When the markets crashed during COVID-19, she was tempted to stop. But she stayed consistent. Today, her portfolio is up by 35%, and she’s closer to her financial goals. The key isn’t timing the market; it’s staying invested.”
“Okay, so I need to restart my SIPs right away?” Manav asked.
“Absolutely,” and you must also know the following similarities between a Dry January and a Mutual Fund Investment:
It can be observed from the above lists that both Dry January and mutual fund investment involve setting clear goals and maintaining a disciplined approach. In Dry January, individuals abstain from alcohol for the entire month, focusing on health and self-awareness. Similarly, in mutual fund investment, individuals set financial goals and make long-term commitments to achieve them, often requiring patience and risk management. Both require tracking progress, avoiding impulsive decisions and evaluating outcomes to ensure they stay aligned with their objectives.
I hope you got some clarity about your thoughts. Rugma asked Manav.
Further, she told him, now think of this January as a financial detox, and instead of cutting back on investments, cut down on unnecessary spending. You should skip those extra weekend splurges or online shopping sprees and redirect that money into your SIPs. It’s your financial Dry January.
Manav’s Financial Detox
Inspired, Manav restarted his paused SIPs and even increased his contribution by ₹1,000. He set reminders to review his portfolio every quarter and track his progress. By the end of January, Manav discovered that his financial detox, much like Dry January, was rooted in discipline and consistency. Restarting and increasing his SIP contributions helped him get his investments back on course and gave him a sense of control over his financial future. He realised that while Dry January was a short-term challenge, the practice of disciplined investing would benefit him for years to come. As the month ended, Manav felt not only physically lighter but also more confident in his financial journey, ready to continue with renewed focus and commitment.
Like Manav, we as investors shall realise that Dry January may be temporary, but SIPs must stay.
Hence, as an individual investor, know your financial goals, seek financial advice, say no to procrastination, understand the time value of money, and start an SIP today.
Wrapping Up
Long term investing in mutual funds India can help you with the power of compounding, cost averaging, and potential to reach long term goals. The only precondition is staying put for a long term. So, before you go on a financial detox, learn about all that a continuous long term mutual funds investing can do to your portfolio.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
Watch here: Rebalancing for Mutual Fund Investors
