Why the rich still get systematic investing wrong

Subscribe to enjoy similar stories. A few weeks ago, a conversation with an investor left me both amused and slightly alarmed. He had a couple of crores from a property sale sitting idle in a savings account.

When I suggested gradually investing it in equity mutual funds through an SIP, he looked almost offended. "But I have ready money," he said, as if I had somehow missed this crucial fact. “I don't need to do SIP." It took a moment to sink in.

In his mind, SIPs were for people who couldn’t invest in one shot. Suggesting an SIP to someone with crores was like offering an Alto to a customer who had walked into a Mercedes showroom. It wasn’t a logical objection—it was about status.

SIPs, to him, were for the poor. This is an unintended side effect of how SIPs have been marketed in India over the past decade. The mutual fund industry rightly focused on democratising investing.

The pitch was simple: you can start with as little as ₹500 a month. No need to wait until you have a substantial sum. Begin where you are, with what you have.

It worked. Millions of Indians who had never considered equity investing now run monthly SIPs, and the cumulative flows have become enormous. But somewhere along the way, this successful marketing created an unintended perception.

If SIPs are for people who can only invest ₹500 or ₹5,000 a month, then surely those with larger sums should be doing something more sophisticated? This is a complete misunderstanding of what an SIP actually does and why it exists. The logic of systematic investing has absolutely nothing to do with the size of your corpus. Whether you have a thousand rupees or several crores, the fundamental problem remains the same: nobody knows what the market will do tomorrow,