For many first-time investors, one question comes up almost immediately: how much money should be invested every month? The idea sounds practical and responsible, especially in an era where SIP calculators and finance influencers constantly push fixed numbers as benchmarks. However, according to Chartered Accountant Abhishek Walia, co-founder of Zactor Money, this is often the wrong place to begin.
In a LinkedIn post, Walia explained that asking for a single “perfect” monthly investment figure without understanding personal context can be misleading. He pointed out that the same amount can feel overwhelming for one person and completely inadequate for another, depending on their financial reality and life goals.
He noted that many people rely heavily on SIP calculators, assuming the output reflects the ideal investment amount. In reality, these tools often simplify life into a single goal and a fixed timeline, ignoring the complexity of real financial situations.
The first question is about purpose. Investors need to be clear on what they are saving for, whether it is a house, retirement, a child’s education, or financial independence.
The second question focuses on time. Every goal has a different deadline, and the investment strategy needs to align with when the money will be required.
The third question looks at the realistic cost of that goal. This involves estimating how much money will actually be needed, rather than relying on vague assumptions.
The fourth question asks investors to review their existing investments. Many people already have SIPs, fixed deposits, or other assets that contribute toward their goals, and these should be factored in before starting something new.
Only after answering these questions, Walia explained, does it make sense to arrive at a monthly investment figure.
Walia pointed out that most calculators assume a clean financial slate, which is rarely the case. Real life usually includes multiple goals, different time horizons, ongoing SIPs, future step-ups, and income that may not be consistent every month.
Because of this, the “perfect” SIP number generated by calculators may look mathematically sound but fail in practical application. It may not suit a person’s lifestyle, cash flow, or long-term commitments.
He emphasised that aligning investments with real goals and personal circumstances matters far more than chasing a neat figure. Understanding this difference, he noted, can have a much bigger impact on long-term financial outcomes than most people realise.
In a LinkedIn post, Walia explained that asking for a single “perfect” monthly investment figure without understanding personal context can be misleading. He pointed out that the same amount can feel overwhelming for one person and completely inadequate for another, depending on their financial reality and life goals.
Why a fixed monthly number can be misleading
Walia highlighted that a standalone investment number has little meaning on its own. Without knowing what the money is meant to achieve, the figure becomes arbitrary. A monthly SIP amount may look disciplined on paper, but it does not automatically translate into financial security or goal achievement.He noted that many people rely heavily on SIP calculators, assuming the output reflects the ideal investment amount. In reality, these tools often simplify life into a single goal and a fixed timeline, ignoring the complexity of real financial situations.
The four questions that should come first
Instead of starting with a number, Walia stressed the importance of asking four basic but vital questions before deciding how much to invest.The first question is about purpose. Investors need to be clear on what they are saving for, whether it is a house, retirement, a child’s education, or financial independence.
The second question focuses on time. Every goal has a different deadline, and the investment strategy needs to align with when the money will be required.
The third question looks at the realistic cost of that goal. This involves estimating how much money will actually be needed, rather than relying on vague assumptions.
The fourth question asks investors to review their existing investments. Many people already have SIPs, fixed deposits, or other assets that contribute toward their goals, and these should be factored in before starting something new.
Only after answering these questions, Walia explained, does it make sense to arrive at a monthly investment figure.
Walia pointed out that most calculators assume a clean financial slate, which is rarely the case. Real life usually includes multiple goals, different time horizons, ongoing SIPs, future step-ups, and income that may not be consistent every month.
Because of this, the “perfect” SIP number generated by calculators may look mathematically sound but fail in practical application. It may not suit a person’s lifestyle, cash flow, or long-term commitments.
What actually makes an investment amount ‘right’
According to Walia, a good investment amount is not one that sounds impressive or matches what others are doing. Instead, it is a number that can realistically support the life a person wants to build, without causing stress or forcing constant course correction.He emphasised that aligning investments with real goals and personal circumstances matters far more than chasing a neat figure. Understanding this difference, he noted, can have a much bigger impact on long-term financial outcomes than most people realise.