How much do you invest each month and how much does it matter?

“opportunity cost visible and charm of equity fades”,I would need little more deliberations on this…Not got it quite.

I have followed a slightly different approach to decide my spends. for example If my current net worth is 2Cr then I am allowed to buy a car worth 20L i.e. 10% of my current net worth. Similarly for all major spends I decide how far I can go. This way I feel one can indulge without putting their financial health at risk.

% of spends and target corpus etc can be decided at a personal level for e.g. international vacation only after reaching xx amount.

This way you are not depriving yourself of anything and making sure you spend within a comfortable limit for self.


What I have said applies for equity MF, mainly. When the invested capital is large, and if the markets don’t deliver for extended periods of time, investors may feel like they would have been better off, if they had invested in debt than in equity. This is the reason why for goal oriented investing, rebalancing is suggested, so as to protect the accumulated corpus, particularly when the time is less. If a stock can rise by 15% in a day, it is also true that it can fall by 15% in a day. The allure of 15% in a day, 100% in 6 months is fantastic, but the reverse is also true. This aspect is not made clear to many investors, what goes up will come down is not mentioned as much as, it goes up. GFC decimated wealth, and today’s tech is far more powerful. On the contrary, as Keynes said, markets can remain irrational more than we can remain insolvent. So the music may very well continue for a number of reasons. So a permanent change may have started, as participants are becoming informed.

Stocks are a different thing, as we know. Each company is different w.r.t to the business it is in, growth, valuation, demand etc. And even if majority of sectors are not performing, there could be some activity going on in selected sectors, there is a chance of getting some profits there. And if the PF is diversified, it can perform better even when the indices are down.


Thank you for your view point Sachin.

I have a question, in the above example, does the 20L come out of the 2CR portfolio?

In my case, the wealth creation portfolio goes untouched until I need it to unlock an opportunity. All known purchases are accounted for separately and saved separately.

yes, to be saved separately. I do not even consider spends like car, house(where you live) as part of investment corpus. Corpus considered includes assets which can be liquidated without any change to the current lifestyle.

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Love this approach. Thank you for sharing! <3

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Bro watch this YouTube video from minute 18:30 they are taking about sip bubble.

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Many categories of mutual funds exist, which have different indices as benchmarks, and as per the categorization rules, MFs can hold some cash to invest even in IPOs. So, while the argument that if more money chases few stocks, then valuations go high, and when who hold more sell at peak, prices fall, there is also a chance that, with tighter regulations, stricter norms and transparency, many new companies enter the market, and market grows where the inflows can be diverted.

The point that retail who blindly participate without any idea will see some loss is true.

While i am appreciative of the detailed mathematical approach, Life does not run in an straight road. There are always twists and turns. We are in the middle of an expanding economy, relative job security and income growth on annual basis, All good,

Five years down the Line, lets say this stagnates or reverses.

Three Things life and time always teach everyone,

  1. Nothing grows forever. 12% CAGR while realistically possible and probable is a dangerous calculation. More likely it will be 9-10%

  2. Expenses are not determinable - Health, Deposits for purchase of Home, other unforseen is difficult to calculate.

3, Stoppage of Income- Either Private Job/Self/ Business- These can dissapear tommorow.

Long Story Short= Savings at an initial stage however high the % on personal basis is an key factor in survivability of these situations.


I watched that part. A large cap fund might be restricted to the large cap stocks. However as @ChaitanyaC pointed out, there are wide variety of mutual funds and not all of them have to stick to the same 50 stocks.

For example a Flexi cap fund can invest in any of the 4000+ listed companies.

I skimmed through the rest of the video and he speaks of a cautionary tale. Figuring out the right valuation is a challenge and even tougher is to trust what you know and stay the course. By staying the course I mean to stay invested even when the market corrects.

Lets see how this turns out. In the mean time educate yourself :slight_smile:

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Thanks for your comment Hardik,

Good point. At 9% CAGR the difference between 50K monthly and 1L monthly will be more profound.

Using the median example of a portfolio with size 50L

  • 50K monthly takes 26 years and 7 months to generate 6.65 Cr.
  • 1L monthly generates 6.67Cr in 20 years.

A difference of over 6 years and 7 months.

Agreed to this. As the saying goes, " Make hay while the sun shines".

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In longer run market grows in proportionate GDP of a country. Ideal value of MC/GDP should be 1 (Buffet Indictor). Its quite natural for flow of money to the equity market to maintain it, if GDP of a country grows.

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Hi Arun. Thank you for this wonderful post. However you may have missed something in this calculation

A person making 50k SIP may be able to increase it at 4-7% depending on how his career turns out. So, if we consider the step up SIP, we may see good benefit in continuing the SIP

On contrary, if a person keeps the SIP at 50k and spends incremental earning in self and family, that would support the point you made.

Few risks to the corpus in early years

  1. sudden one time expenses like marriage, if costs 10lakh, that would be a big portion of starting capital of 10L, 50L, 1Cr :cry::cry:
  2. Down paymnet for house would be 7-20L which is also a big portion :cry::cry:

But yeah, your points are well taken and would give a better perspective.


Thank you for the appreciation @praveen_potnuru :slight_smile:

The point about increasing SIP was previously raised by @parkhi_nazar and I repeated the math here - How much do you invest each month and how much does it matter? - #12 by ArunL

It does make a difference, but the difference is not as much as I thought it would be.

Eroding the starting corpus as you said is going to make a big dent. But this calculation only works for our long term wealth generation bucket, not the short term buckets.

To quote myself from my previous reply:

The point is not to invest less, not at all. The point is that the difference between 1L and 50K isn’t a whole lot. So investing less on a certain month because you want to splurge a little or take your family on an impulse vacation or treat yourself to a brand new coffee machine wouldn’t matter much in big picture.

As I said before, the “investing addiction” was making me live in a future at the cost of the present. This exercise helped me see the full story.

The peace of mind I have been enjoying ever since I did this calculation is truly priceless. I still invest just as much as I did before, but it’s 10x stress free now. I think I have found my balance.

Happy to know that someone read this thread after all this time. Happy new year!