Riya and Priya started an investment of Rs 5,000 on a monthly basis in the same Mutual Fund schemes via Systematic Investment Plan (SIP).

At that time, Riya opted for Step-up facility of her SIP, which meant she could increase her SIP contribution year-after-year by a fixed amount or percentage. She registered to increase her contribution by 10% every year.

Priya, on the other hand, wasn't sure about registering for the Step-up option and chose not to do so.

After 10 years, assuming an annual rate of return of 12%, Riya's corpus will grow to Rs 16.8 lakh, while that of Priya will grow to Rs 11.6 lakh. That is a difference of around Rs 5 lakh.

If we calculate the same for a period of 20 years, Riya's corpus will grow to Rs 99.4 lakh and Priya's corpus will grow just close to Rs 50 lakh.

Within a span of 20 years, Riya's wealth will almost double compared to that of Priya.

This is the incredible benefit of stepping up your SIP.

Like Riya, if you wish to increase your wealth exponentially, increasing your SIP contribution every year could prove beneficial.

Here are three key benefits of stepping up your SIP instalment:

1) Facilitates building a bigger corpus

Most people start investing via a SIP but don't consider increasing their contribution even when their income and surplus increases every year. By stepping up your SIP instalment, it adds to the power of compounding, and the potential return enables you to build a bigger corpus to accomplish your future financial goals.

If you wish for a handsome amount in your hand at the end of 10, 15, or 20 years, increase your monthly SIP instalment year-after-year. Even a small increase now can make a big difference in the long-term.

2) Counters inflation

Earning an effective real rate of return, or to put it simply, return adjusted for inflation, is an important factor to be considered while investing.

Earning a higher real return helps you achieve your financial goals comfortably by countering inflation, which otherwise erodes the purchasing power of your hard-earned money.

Inflation increases every year, the amount that seems substantial today will not have the same value a few years down the line. Hence, if you don't increase your monthly SIP instalment every year, it means that you are ignoring inflation - making a big mistake!

3) Achieve the envisioned goals faster

By increasing your contribution every year, you would be able to achieve your goals faster than expected. For example, by increasing your SIP by 20% every year, you may be able to plan an early retirement. However, this will depend on by how much you decide to step up your SIP instalment and the amount you require to fulfil your goal.

[Read: Is Your Mutual Fund On Track To Achieve Your Financial Goals?]

The table below explains how different levels of a percentage hike in monthly SIP year-after-year, starting with a monthly SIP instalment of Rs 5,000 in the first year will grow your wealth over 20 years, assuming an annual rate of return of 12%.

Table: How increasing SIP instalment every year enriches the power of compounding...

% increase in SIP	Corpus at the end of tenure (in Rs)
0	49,95,740
5	68,68,812
10	99,44,358
15	1,51,27,971
20	2,40,21,370

(Note: For illustration purpose only)

As seen in the table, if the amount invested via SIP doesn't increase, the amount that you will earn at the end of tenure will be very low. In comparison, if the SIP is hiked even by 5% or 10%, the amount at the end of tenure will be significantly higher.

How you can do it...

You can either increase your SIP by a certain fixed percentage or a fixed amount. The increase can either be in a new scheme or an existing one. You can set an upper limit on the amount so that the hike does not exceed your budget.

An appraisal is the best time to do so as you may have got a salary hike and/or bonus. You may opt to increase your monthly SIP instalment in line with the increase in income. Your expenses may not necessarily increase with the extra income, which will allow you to make the additional investment. Your priority should be to achieve the existing goals; and hence, you should avoid aligning the additional investment to new goals.

If you have received a bonus, you may park your money in a liquid fund and opt for Systematic Transfer Plan (STP) to transfer money in equity funds regularly.

In case you did not receive a salary hike, you can still check if circumstances allow you to increase your investment.

For any investment proper planning is very important. You should set realistic goals to be able to achieve them.

After that, carefully decide your monthly SIP amount keeping in mind your goals, risk appetite and time horizon. Increase your investment as and when your income increases or if you have a surplus in your hand. It will help you to beat inflation and accomplish your goals.

Lastly, be patient once you have selected the right mutual fund schemes and follow the needed investment discipline.

PS: Still undecided about mutual funds for starting a fresh SIP? Don't worry. PersonalFN is offering you three premium research reportsat a price lesser than that of your favourite coffee.

These research reports will provide you superlative guidance to select worthy mutual fund schemes to SIP, the ones that have the potential to provide BIG gains, and the ones for your tax planning this year. Click here for PersonalFN's recommendation and subscribe now!

Add Comments

Comments
morganreed111@gmail.com Jun 17, 2019 I want to share a testimony of how Dr UDI herbal mixture cream saved me from shame and disgrace, my penis was a big problem to me as the size was really so embarrassing ,and i was also having weak erection problem i had so many relationship called off because of my situation, i have used so many product which i found online but none could offer me the help i searched for Which was very painful and then i saw some few testimonies about this herbal specialist called Dr UDI and decided to email him on so I gave his herbal product a try. i emailed him and he got back to me and we discussed, he gave me some comforting words and encouraged me also ans then gave me his herbal pills and cream for Penis Enlargement Within 1 week of it, i began to feel the enlargement of my penis, " and now it just 2 weeks of using his products my penis is about 10 inches longer and am so happy contact Dr UDI via (drudiherbalhome@gmail.com) Via whatapp on this number +2348051243538
BOANTERAY@GMAIL.COM May 02, 2019 I have been in relationship with my boyfriend for 2 year now and we were planning to get married soon and all of a sudden he left me for another girl, i really love this guy and never can imagine my life without him. I further tried all my best to get him back but all my effort to get him back in my life did not work out. It was on this faithful day, i came across some comments on a website about this great spell caster called Chief Dr Lucky, so many persons claimed that he help them to renew their relationship and bring their ex back, i had to contact him because he was my last hope. I contacted him through his email and he assured me that in two days time my boyfriend is going to leave the other girl and come back to me and it was a very great surprise to see my boyfriend coming back to me after two days. I am so very happy today that he came back to me and i achieved this with the help of Chief Dr Lucky, and i advice if you need his help too Email: Chiefdrlucky@gmail.com or Whats App: +2348132777335
agabrielle878@gmail.com May 06, 2019 Why are everyone looking for ways online to get help solving their pregnancy problems when most of every native American is talking online about the help of Prophet Abulele. I checked him out when my husband who could not get me pregnant for over 9 years of marriage as a result of low sperm count became fertile and now, I am 5 months pregnant and it is this man known as Prophet Abulele who helped my husband's problem. My name is Angela Gabrielle from Colorado, USA. I would advise anyone and everyone who needs the help of any spell caster in getting their ex back or trying to conceive to meet this Prophet Abulele at his mail or email at (prophetabulelehealingtemple@gmail.com) for He is Reliable and true. I and my husband have gone to different hospitals having the thinking that I was at fault for not getting pregnant. But at the Federal hospital, they examined him too and his sperm count was low and unable to get a woman pregnant as a result of male infertility. It was then I sort out for the help of spell casters in getting pregnant and I contacted Prophet Abulele and he solved my problem once and for all. Immediately I paid for the items he said he would use; I became pregnant after sleeping with my husband. It is very real to be helped by a spell caster in fertility and conception. After 9 years of waiting, I am finally going to have my baby with me. Email prophetabulelehealingtemple@gmail.com and WhatsApp number +2349022406159. to save your marriage and be a happy family
oduckayamud49@gmail.com May 18, 2019 ATTENTION TO THE WHOLE WORLD: Hello and blessed are you who found me. My name is DR ODUCK AYAMUD ( oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM ), and am here to help you change and transform your life in the most positive way possible. I use the power of white, black craft and Wicca and voodoo spell casting to help people just like you they get the love they want and the money they deserve. My love spell offer amazing and quick results. Do you want to find your soulmate? Do you want to reunite with a past lover and make him or her love you again? Do you need to bind a troublemaker from causing problems in your relationship? With my spell casting service, I can cast a love spell on your behalf that will help all of your wishes and dreams come true. I also do other custom spells, such as money spells, job spells, friendship spells, and good luck spells. You may have already tried the power of spells and prayers to get what you want. Although it is true that everyone has the ability to cast spells and perform magic, spell casting is like a muscle. Everyone has this 'muscle' but the more you use it, the stronger it gets, and the more things you are able to do with it. If you are not an experienced spell caster, your spell may not be as strong, and the results not as quick as you may desire. GET YOUR PROBLEMS SOLVE HERE AND BE FREE!! Hello to people that want to be Great, Note: This Spell casting do not have any effect on any one, But just to get your problem solve ok. Get your problem solve in master...You can get the bellow problems solve here. 1. Bring back lost lover, even if lost for a long time 2. Remove bad spells from homes, business & customer attraction etc. 3. Get promotion you have desired for a long time at work or in your career. 4. Remove the black pot that keeps on taking your money away 5. Find out why you are not progressing in life and the solution 6. Eliminate in family fights 7. Ensure excellent school grades even for children with mental disabilities 8. Stop your marriage or relationship from breaking apart 9. I destroy and can send back the Nikolos if requested 10. We heal barrenness in women and disturbing menstruation 11. Get you marriage to the lover of your choice 12. Guarantee you win the troubling court cases & divorce no matter how what stage 13. Ensure success in work and business 14. Mental illness & bewitched 15. Can’t sleep at night or walking at night 16. Recover stolen property and whereabouts of people that hurt you. 17. Bring supernatural luck into your home 18. Extreme protection for those doing dangerous jobs like security guards, Bank manager, cash transporters, etc 19. GET YOUR SCAMMED MONEY BACK TO YOU AS HE CAN HELP YOU RECOVER YOUR LOST MONEY BACK BY DOING LOST MONEY RECOVERY SPELL FOR YOU. I have over 20 years of spell casting experience, and i have successfully cast spells to help hundreds of people improve their love life, financial situation, and happiness. I can help you, and I want to help you. Read through my words and CONTACT ME VIA: oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM. AS MY POWERS ARE SO STRONG AND VERY EFFECTIVE AND HAS NO BAD EFFECT INSTEAD IT HAVE A VERY GOOD RESULT AFTER CASTING THE SPELL. CONTACT HIM AGAIN ON HIS EMAIL ADDRESS: oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM..... YOU CAN ALSO CALL / ADD HIM UP ON WHATSAPP USING THIS MOBILE NUMBER:+2347059232579
oduckayamud49@gmail.com May 18, 2019 ATTENTION TO THE WHOLE WORLD: Hello and blessed are you who found me. My name is DR ODUCK AYAMUD ( oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM ), and am here to help you change and transform your life in the most positive way possible. I use the power of white, black craft and Wicca and voodoo spell casting to help people just like you they get the love they want and the money they deserve. My love spell offer amazing and quick results. Do you want to find your soulmate? Do you want to reunite with a past lover and make him or her love you again? Do you need to bind a troublemaker from causing problems in your relationship? With my spell casting service, I can cast a love spell on your behalf that will help all of your wishes and dreams come true. I also do other custom spells, such as money spells, job spells, friendship spells, and good luck spells. You may have already tried the power of spells and prayers to get what you want. Although it is true that everyone has the ability to cast spells and perform magic, spell casting is like a muscle. Everyone has this 'muscle' but the more you use it, the stronger it gets, and the more things you are able to do with it. If you are not an experienced spell caster, your spell may not be as strong, and the results not as quick as you may desire. GET YOUR PROBLEMS SOLVE HERE AND BE FREE!! Hello to people that want to be Great, Note: This Spell casting do not have any effect on any one, But just to get your problem solve ok. Get your problem solve in master...You can get the bellow problems solve here. 1. Bring back lost lover, even if lost for a long time 2. Remove bad spells from homes, business & customer attraction etc. 3. Get promotion you have desired for a long time at work or in your career. 4. Remove the black pot that keeps on taking your money away 5. Find out why you are not progressing in life and the solution 6. Eliminate in family fights 7. Ensure excellent school grades even for children with mental disabilities 8. Stop your marriage or relationship from breaking apart 9. I destroy and can send back the Nikolos if requested 10. We heal barrenness in women and disturbing menstruation 11. Get you marriage to the lover of your choice 12. Guarantee you win the troubling court cases & divorce no matter how what stage 13. Ensure success in work and business 14. Mental illness & bewitched 15. Can’t sleep at night or walking at night 16. Recover stolen property and whereabouts of people that hurt you. 17. Bring supernatural luck into your home 18. Extreme protection for those doing dangerous jobs like security guards, Bank manager, cash transporters, etc 19. GET YOUR SCAMMED MONEY BACK TO YOU AS HE CAN HELP YOU RECOVER YOUR LOST MONEY BACK BY DOING LOST MONEY RECOVERY SPELL FOR YOU. I have over 20 years of spell casting experience, and i have successfully cast spells to help hundreds of people improve their love life, financial situation, and happiness. I can help you, and I want to help you. Read through my words and CONTACT ME VIA: oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM. AS MY POWERS ARE SO STRONG AND VERY EFFECTIVE AND HAS NO BAD EFFECT INSTEAD IT HAVE A VERY GOOD RESULT AFTER CASTING THE SPELL. CONTACT HIM AGAIN ON HIS EMAIL ADDRESS: oduckayamud49@yahoo.com OR oduckayamud49@gmail.com .... YOU CAN USE ANY OF THE EMAILS TO CONTACT HIM..... YOU CAN ALSO CALL / ADD HIM UP ON WHATSAPP USING THIS MOBILE NUMBER:+2347059232579

 1