'If your money doesn’t know its job...' CA Abhishek Walia on why SIPs alone aren’t enough

For many young professionals in India, setting up a Systematic Investment Plan (SIP) feels like a smart financial move. But relying solely on SIPs without a bigger strategy could be a costly mistake, warns CA Abhishek Walia, Founder of Zactor Tech.

“I hear this all the time,” says Walia. “‘I have SIPs. Isn’t that enough?’ And honestly, a SIP alone is not a financial plan.”

A Systematic Investment Plan, or SIP, is simply a method of investing in mutual funds wherein an investor chooses a fund scheme and invests a fixed amount at regular intervals. In May 2025, SIP (Systematic Investment Plan) inflows reached a record high of Rs 26,688 crore, according to the Association of Mutual Funds in India (AMFI). This represents a new all-time high in monthly SIP contributions. The number of SIP accounts also reached a record 8.56 crore. 

“Think of SIP as a disciplined way of investing small amounts over time rather than putting in a large lump sum all at once,” explains Walia. “It helps reduce market volatility risks because your purchases get spread across market highs and lows.”

Here’s how it works: once you start an SIP, the chosen amount is automatically debited from your bank account and invested into the mutual fund at your selected frequency—usually monthly. “At the end of each investment day, units of the mutual fund are allocated based on that day’s Net Asset Value (NAV),” Walia says. “Each new investment buys more units, and as your investment grows, so does the reinvested amount and the returns it can generate.”

Investors also have flexibility in how they receive their returns, either at the end of the SIP’s tenure or through periodic payouts.

However, Walia cautions that while SIPs make investing effortless, they should never be mistaken for a complete financial plan. “A SIP is a vehicle, not a destination,” he stresses. “It’s like walking to the airport. Just because you’re moving doesn’t mean you’ll board the right flight.”

He often sees young investors in their 20s and 30s start a Rs 5,000-per-month SIP in a trending mutual fund, feel satisfied about being disciplined, and then neglect to track it or connect it to a clear goal.

“They keep investing for five years and suddenly need funds for a master’s degree, a wedding, or a house down payment,” he says. “They’ve saved up Rs 3 lakh, but it’s not enough because they never calculated how much they truly needed or picked the right mutual fund product for their goal and timeline.”

Walia offers a simple example. Suppose someone wants to invest Rs 1 lakh in a mutual fund. They could invest the entire sum at once—known as a lump-sum investment—or choose the SIP route. “With an SIP, say of Rs 500 per month, Rs 500 gets deducted from your account automatically every month and invested into your chosen fund,” he explains. “This continues until the intended period, making it easy for people to invest regularly without feeling a big financial pinch.”

While SIPs help build wealth gradually, Walia emphasizes that successful investing requires clarity and purpose. “Start with your goal,” he advises. “If you need Rs 20 lakh in five years, work backwards to determine how much to invest each month. Then choose the right asset class based on your risk tolerance and timeline, and finally, automate it through SIPs.”

“Don’t confuse automation with direction,” Walia warns. “Discipline is great. But discipline without clarity is just expensive guesswork. If your money doesn’t know its job, it won’t perform. It’s not about investing more—it’s about investing better.”

As SIPs and mutual funds continue to grow in popularity, Walia’s message is a timely reminder that while SIPs are a powerful tool, true financial security comes from investing with purpose and planning for specific goals.