Respeted Expert(s), I am 45 years old and don't have any investment plans yet. This is largely due to a volatile employment history. Whenever I had tried savings/investment etc, certain employment issues came up which didn't allow me to opt for investments. Anyways, currently i am drawing 8.40 lakhs per annum. No kids. Wife is drawing 9.60 lakhs per annum. I want to explore SIP. Could you guide? I will be able to manage 5-7 thousand per month in investment.

Ans: You have taken the right step by thinking about investments now. Many people delay it further. You are doing well by starting at 45. You and your wife have stable incomes now. This is a good time to build financial discipline and long-term wealth through SIPs. Your awareness and willingness to act now matter more than what you missed earlier.

» Understanding Your Current Situation

You both earn together around Rs 18 lakh per year. That gives a strong base to plan ahead. You have no children, so your household expenses are likely under control. You mentioned past instability in your job. That is understandable. Many people face the same issue. Still, now that income is stable, SIPs can help create financial security and flexibility for the future.

You are ready to invest Rs 5,000 to Rs 7,000 per month. That is a practical and sustainable start. SIPs work best when started small and continued regularly. Over time, compounding will do the rest.

At your age, the goal should be twofold – growth with some stability. You may not want very high risk, but you still need good returns to beat inflation and build wealth.

» Why SIP is a Wise Choice for You

SIP, or Systematic Investment Plan, helps you invest regularly in mutual funds. It brings discipline and consistency. You don’t have to time the market. You invest a fixed amount monthly, and over time, this builds wealth smoothly.

It also protects you from market ups and downs. When the market is low, you buy more units. When it is high, you buy fewer. This averaging reduces the overall cost.

For someone with a history of unstable income earlier, SIP brings a sense of control. It keeps your investment effort simple and predictable.

» Setting Financial Goals Before Investing

Before investing, think of your main financial goals. Since you have no children, your goals can be simpler:

– Retirement corpus
– Emergency fund
– Travel and lifestyle goals
– Health security for both

Write these goals clearly. Link each SIP to a specific goal. This gives purpose to your investment and keeps you motivated even during market fluctuations.

» Ideal Allocation Strategy

You can start with Rs 7,000 monthly. You can divide this into three parts for balance:

– Around 60% in equity mutual funds for growth
– Around 30% in hybrid or balanced funds for stability
– Around 10% in debt or liquid funds for safety and liquidity

This combination keeps your portfolio stable. It also gives you long-term growth potential.

» Importance of Choosing Actively Managed Funds

Some investors talk about index funds or ETFs. But those just copy an index. They don’t try to outperform it. They can’t protect you from sudden market risks.

Actively managed funds, on the other hand, are guided by fund managers. These managers study companies, sectors, and the economy. They adjust the portfolio as needed.

This helps in capturing opportunities and controlling risk. Especially for someone like you, who is starting later, active funds can deliver better value.

They can generate higher returns if you stay invested patiently.

» Why You Should Choose Regular Funds through a Certified Financial Planner

Some investors prefer direct funds. They think they save cost. But direct funds need your full attention. You must choose the right scheme, review it often, and handle tax and rebalancing yourself.

A Certified Financial Planner (CFP) or Mutual Fund Distributor with CFP credential helps you manage all this. Regular funds include advisory support. The cost difference is small, but the value you get from guidance is high.

A CFP will help you align your SIPs with your goals, review performance regularly, and make changes when required.

Direct funds may look cheaper but can cause bigger losses if wrong choices are made. Regular funds through a CFP are safer and smarter for long-term investors who want peace of mind.

» Emergency Fund – Your Safety Net

Before SIP, ensure that you have an emergency fund. It should cover 6 months of expenses. Keep it in a liquid mutual fund or high-interest savings account.

This fund will help you if job loss or medical issues come again. It ensures you don’t stop SIPs during emergencies. SIPs work best when you continue them without gaps.

Once this fund is ready, you can start your SIP confidently.

» Suggested Category Mix for SIPs

You can build your SIP portfolio in stages:

– Large Cap Fund – This gives steady growth and less volatility. These invest in India’s top companies.
– Flexi Cap Fund – These can shift between large, mid, and small companies. They give good balance of risk and return.
– Aggressive Hybrid Fund – This mixes equity and debt in one scheme. It cushions risk during market falls.
– Short Term Debt Fund or Liquid Fund – This can be used for short-term needs and stability.

Keep your SIPs in 3 to 4 schemes only. Too many funds reduce focus.

» Reviewing Your SIPs Regularly

Once you start SIPs, review them once a year. Don’t stop or switch too often. Markets will rise and fall. Stay focused on long-term growth.

If your income increases later, raise your SIPs by 10% every year. This keeps your savings aligned with inflation.

If any fund performs poorly for two years continuously compared to peers, consult your CFP and shift carefully.

» Importance of Insurance Coverage

Even though you have no kids, you must protect your income. Take adequate term life insurance. A simple term policy is enough. It should cover at least 10 times your annual income.

Also take good health insurance for you and your wife. Medical costs are rising fast. A single hospitalisation can wipe out savings.

If your company already offers health cover, still keep a personal policy. It ensures coverage even if you change jobs.

» Tax Planning with SIPs

Equity mutual funds held for more than one year are taxed as Long Term Capital Gains (LTCG). Under the new rules, gains above Rs 1.25 lakh per year are taxed at 12.5%.

If you redeem before one year, gains are taxed at 20% as Short Term Capital Gains (STCG).

For debt funds, both short-term and long-term gains are taxed as per your income slab. So holding longer in equity funds gives better tax advantage.

SIPs in Equity Linked Saving Schemes (ELSS) can also help save tax under Section 80C. But lock-in is three years.

Tax planning should be a part of your overall financial design, not an isolated act.

» Building a Retirement Corpus

You both are earning well now. But after 15-20 years, you will need a corpus to sustain your lifestyle.

You can build this gradually through SIPs. Even Rs 7,000 per month can grow big if you stay invested long enough.

When your income rises, you can increase SIP amount and accelerate growth. Retirement planning is not only about returns. It is also about steady savings and patience.

» Behavioural Discipline – The Key to Wealth Creation

Most investors lose money not because of poor funds, but because of poor habits. Avoid checking your portfolio too often. Don’t stop SIPs during market downturns.

Remember, every fall in the market is a chance to buy more at low cost. Continue your SIPs no matter what.

Stay patient for at least 10 years to see real growth. Wealth creation is slow but certain for disciplined investors.

» Joint Planning with Your Spouse

You and your wife both earn well. You should plan together. Share your goals and create a common roadmap.

Combine your SIPs for faster growth. You can invest in your name or jointly. But the plan should be shared and transparent.

This builds trust and also brings clarity about responsibilities and goals.

» Avoid Common Mistakes

– Don’t invest randomly based on others’ suggestions.
– Don’t withdraw SIPs midway.
– Don’t invest in products that mix insurance and investment.
– Don’t chase short-term returns.
– Don’t start SIPs without emergency savings.

These mistakes cause stress and loss. Follow your plan calmly and stick to your goals.

» Financial Behaviour During Job Changes

Since you faced employment breaks before, keep flexibility in your plan.

Maintain 3 to 6 months’ expenses as cash reserve. If job issues come again, use this buffer.

Never stop SIPs unless absolutely needed. If needed, pause only temporarily, not permanently.

Also, try to maintain one joint account for all SIP debits. This simplifies tracking and discipline.

» Regular Monitoring and Professional Review

You should meet your Certified Financial Planner once a year. Review your portfolio, goals, and risk profile.

As you grow older, shift slowly from equity to hybrid and debt. This keeps your portfolio safe.

Professional review ensures your investments stay aligned with your life changes.

» Finally

You are beginning at 45, but that is perfectly fine. You still have 15-20 productive years ahead. Your dual income gives great strength.

Start small but stay steady. SIPs will build wealth slowly and surely.

Keep emergency funds ready, choose actively managed funds, review yearly, and stay patient.

Financial planning is not about how early you start, but how consistently you continue.

You have shown awareness and willingness. That itself puts you ahead of many.

Start your SIPs now. Stay regular. Let time and discipline do the rest.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment