“A river cuts through rock not because of its power but because of its persistence.” So very true ! Ever wondered why you can literally walk on a river bed bare foot and why the rocks and stones found on the floor of a river are absolutely smooth and perfectly rounded. Try walking on bare rock otherwise and even the best of shoes may not last long. Have the rocks on the river bed smoothened overnight? Certainly not, it is the result of the river flowing over these rocks for hundreds of years persistently during which it cut the rock face and made it smoother and smoother. Without this persistency, smoothening a rock needs humungous power. Even then the results may not be as perfect. So what does this teach us?

Clearly, lessons on how persistency can reward us in the long run especially when it comes to our investments. While all of us wish to create wealth to meet our life goals, very few of us are able to meet all our goals. Two key reasons for the shortfall are – i) most of us give very little time for our investments to grow and ii) we lack the persistency to save over the long term. As a result, we may end up either skipping or postponing some important goals. But why wait for this situation to arise when you just need to do what the river does. ‘Persistency’ in investments over the long run can help one to achieve the ‘hardest’ of goals. Let’s see how it works?

There are certainly no short cuts and one must simply save small amounts right from their first salary and earmark relevant amounts for each goal. For example, you could earmark Rs.500 per month for one goal and Rs.1000 per month for another goal and so on. Here  mutual funds can help you to save regularly via small instalments (as low as Rs.500 per month) via Systematic Investment Plans or SIPs. Why mutual funds? They offer both variety and convenience as you can invest in equity and / or debt via SIPs besides providing tax advantages as well as the potential to earn higher returns.

Follow simple thumb rules like choosing equity mutual funds if your goals are more than five years away (like your retirement or your child’s higher education). For short term goals which are less than five years away, you can choose debt funds or hybrid funds with a marginal equity component. SIPs are like your Good EMI – a small and consistent investment to meet your life goals. Add a dash of persistency and longevity to your SIPs and you have the right ingredients to help you achieve your goals. So even if some of your goals are high cost; persistency can help you achieve them by investing small amounts over long periods, just like the river which smoothens rocks after flowing persistently for hundreds of years.

Use the SIP calculator online to calculate your returns on your investments.

Information contained in this article is not a complete representation of every material fact and is for informational purposes only. The recipient is advised to consult its advisor/ tax consultant prior to arriving at any investment decision.