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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Significance of Adhik Month

As Adhik Maas comes to a close, it is the right time to reflect on the deeper meaning of this sacred month. Adhik Maas, also known as Purushottam Maas, is dedicated to Lord Vishnu and is considered one of the most auspicious periods in the Hindu calendar. It is a month associated with prayer, discipline, reflection, charity and positive action. Why Adhik Maas Is Added Adhik Maas occurs roughly once every three years. The traditional Hindu calendar is lunisolar, which means it follows lunar...

Significance of Adhik Month

As Adhik Maas comes to a close, it is the right time to reflect on the deeper meaning of this sacred month. Adhik Maas, also known as Purushottam Maas, is dedicated to Lord Vishnu and is considered one of the most auspicious periods in the Hindu calendar. It is a month associated with prayer, discipline, reflection, charity and positive action. Why Adhik Maas Is Added Adhik Maas occurs roughly once every three years. The traditional Hindu calendar is lunisolar, which means it follows lunar months while also staying connected with the solar year and the seasons. Since the lunar year is shorter than the solar year, a difference gradually develops between the two. To bring the calendar back into balance, an extra month is added after almost every three years to synchronise the lunar and solar cycles. In simple words, Adhik Maas is a month of adjustment, alignment and correction. A Lesson for Our Own Lives This idea has a beautiful message for our own lives. Just as the calendar needs realignment, our life also needs regular realignment. Our habits, priorities, relationships, health, career and finances cannot be left unattended forever. From time to time, we must pause and ask ourselves whether our actions are matching our goals. Realignment in Investments The same principle applies to investments. Many people begin investing with good intentions, but after that, they do not review their investments and financial goals regularly. A SIP may be started, but it may not be increased for years. Lumpsum investments may be delayed even when money is lying idle in the bank. Financial goals may change, income may increase, responsibilities may increase, but the investment plan remains the same. Increase SIPs and Do Something Extra For long-term goals beyond three years, money should be invested in growth-oriented assets such as stocks, equity mutual funds, hybrid mutual funds and gold. If your income has increased in the last one year, your SIP should also increase. Ideally, one should try to invest at least 30% of monthly income through SIPs. This sacred month also teaches us the importance of doing something extra. In investments, that extra effort can be in the form of lumpsum investing. Whenever you receive additional money such as bonus, incentive, business profit, gift or surplus cash, it should be put to productive use. Correction Is Necessary for Growth Adhik Maas reminds us that correction is not a negative thing. In fact, correction is necessary for growth. The market also corrects to adjust itself and build a stronger foundation for newer highs in the future. That is why markets remain volatile and uncertain in the short term, but over the long term, they reward patience, discipline and consistency. Questions to Ask Before Adhik Maas Ends The end of Adhik Maas should not be seen only as the end of a religious period. It should be seen as an opportunity to take stock of life and money. Are your SIPs aligned with your current income? Have you invested your surplus cash? Are your investments sufficient for your future goals? Are you taking action, or only waiting? Reflection Must Become Action As Adhik Maas ends on 15 June, let us carry its message forward. Realign where needed. Correct what has been ignored. Add the extra effort required. A sacred month becomes truly meaningful when reflection turns into action. (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

SIP: All You Need to Know and three Key Benefits

Updated: Nov 18, 2024

SIP: All You Need to Know and three Key Benefits

A Systematic Investment Plan (SIP) is one of the most efficient ways to create wealth through the power of compounding. In this article, I will explain everything about SIP and its three benefits.


What is SIP?

In simple terms, an SIP allows you to invest a fixed amount of money every month into various mutual fund schemes. This amount is automatically debited from your bank account and invested into the selected schemes without requiring any further action on your part.


The best way to look at SIP is by calling it - Sapna In Progress. For every financial goal of yours, you must allocate a sufficient amount of SIP.


Three Benefits of SIP

1. Simple and Convenient: Once you set it up, the money is automatically deducted from your account and invested in your chosen set of schemes. There is no minimum or maximum limit. You can start as low as INR 1000. The higher the SIP, the more you benefit in the long term. Hence SIPs are very welcoming due to its flexibility and accessibility to all kinds of investors. However, it is crucial to consult with a financial advisor to help you select the right schemes based on your financial goals and risk tolerance. Financial advisors bring valuable education, wisdom, expertise and experience to the table, ensuring your investment strategy is sound.

2. Automated: After the initial setup, SIP is a hands-off process. Once your account is opened and mandate is registered, the future contributions are automatically debited on the chosen date without any further involvement. Wealth is built with minimal effort.

3. Rupee Cost Averaging & Compounding: SIP takes advantage of market fluctuations through a concept called rupee cost averaging. When the stock market is high, fewer units are bought; when the market is down, more units are purchased at lower prices. This strategy helps you build wealth steadily over time, as more units are accumulated at a lower average cost. Over the long term, the power of compounding amplifies the growth of your investment, enabling significant returns as the market recovers and rises.


How Much Should You Invest?

A general guideline is to allocate at least 25% to 30% of your monthly income toward SIPs. As your income grows over time, you should increase your SIP contributions accordingly. Every 12 months, review and adjust your SIP to match your rising income, ensuring you continue to invest a substantial portion of your earnings.


Is Your SIP Sufficient?

One key point to consider is whether your SIP contributions are sufficient for your long-term financial goals. There is no "small" or "big" SIP—only adequate or inadequate. To determine this, you need to calculate how much money you will require after 5, 10, or 20 years, factoring in inflation and your financial objectives. This will give you a clearer picture of how much you need to invest monthly to meet your goals.


SIP is a powerful investment tool that simplifies the process of building wealth over time. SIPs are not just about investing money; they are about cultivating a habit of disciplined, consistent investing that helps secure your financial future.


(The author is a Chartered Accountant and CFA (USA). Financial Advisor.

Views personal. He could be reached on 9833133605. )

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