Now Reading: Mutual fund SIP can start with Rs 100, says expert
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Mutual fund SIP can start with Rs 100, says expert
Young investors do not need a large amount to start investing in mutual funds, financial discipline matters more, said Pankaj Mathpal, founder and managing director of Optima Money Managers. In an interview…
Young investors do not need a large amount to start investing in mutual funds, financial discipline matters more, said Pankaj Mathpal, founder and managing director of Optima Money Managers. In an interview with Business Today, Mathpal said Gen Z's biggest challenge is not a lack of investment options but the habit of overspending, taking loans early, and delaying regular investments.
Mathpal said a SIP can begin with as little as Rs 100. He warned that easy access to personal loans, buy-now-pay-later services, and salary advances through fintech platforms is trapping many young people in a debt cycle before they start investing. He advised following the 50-30-20 budget rule, keeping limited exposure to risky assets like crypto and F&O, and prioritising an emergency fund and insurance. A monthly SIP of Rs 10,000 to Rs 20,000 can build a corpus of about Rs 50 lakh in 10 years, he said.
Indian Opinion Analysis
Mathpal's advice echoes the Securities and Exchange Board of India's broader effort to channel retail savings into systematic investment plans. SEBI data show that the number of SIP accounts has crossed 10 crore, yet the average ticket size remains modest. The 50-30-20 rule he cites is a standard budgeting framework: 50% of income on needs, 30% on wants, and 20% on savings and debt repayment. For a young professional earning Rs 40,000 a month, that means Rs 8,000 available for investments and loan payments. The real risk Mathpal flags is the rapid growth in unsecured personal loans, which the RBI flagged in its December 2023 financial stability report as rising faster than secured credit. How many young investors actually stick to a disciplined SIP through a market downturn will determine whether this advice translates into wealth or merely churn.
The next signal to watch is the monthly net SIP flow data from the Association of Mutual Funds in India for the coming quarter.
Source: bazaar.businesstoday.in
This brief was synthesised by AI from the source linked above.
