One of the most common questions investors ask is:
“How much money should I put in a Stock SIP?”

The answer depends on your income, goals, and risk appetite.

💰 6 scientific methods to calculate your ideal SIP amount

📊 Real-life examples for different salary levels

⚠️ Dangers of over-investing or under-investing

📈 How to increase SIP amounts smartly

What is a Stock SIP?

A Stock SIP (Systematic Investment Plan) is a way to invest a fixed amount of money regularly (like monthly) into specific stocks, instead of putting a big lump sum all at once.

Simple way to think about it:
It’s like a mutual fund SIP, but here you are buying individual company shares in small, steady installments over time — automatically.

How It Works

• You invest a fixed amount monthly in stocks/ETFs
• Automatically buys more units when prices are low

Key Benefits

✔ Disciplined investing
✔ Rupee-cost averaging
✔ Starts with just ₹500/month

6 Methods to Calculate SIP Amount

Method 1: The 50-30-20 Rule (Best for Beginners)

• 50% Needs (Rent, Food, EMI)
• 30% Wants (Entertainment, Travel)
• 20% Investments (SIP + Emergency Fund)

Example:

• Monthly Income = ₹50,000
• SIP Amount = ₹10,000 (20%)

Method 2: 10% of Take-Home Salary

• Safest approach for risk-averse investors
• Example: ₹80,000 salary → ₹8,000 SIP

Method 3: Goal-Based Calculation

1. Define goal (e.g., ₹1 Crore in 15 years)
2. Use SIP calculator (12% returns → ₹15,000/month)

Method 4: Surplus Income Method

• Income – Expenses – Emergency Savings = SIP Amount
• Best for irregular earners

Method 5: Step-Up SIP Formula

• Start with ₹5,000 → Increase 10% yearly
• Year 5 SIP = ₹8,053/month

Method 6: Risk Capacity Calculation

• Aggressive: (Age – 100)% in equities
• 30-year-old → 70% of savings in SIP

Real-Life SIP Examples

Monthly Salary	Recommended SIP	Best Options
₹25,000	₹2,500-₹5,000	Index ETFs
₹50,000	₹7,500-₹15,000	Bluechip Stocks
₹1 Lakh+	₹20,000-₹50,000	Portfolio of 8-10 Stocks

Dangers of Wrong SIP Amounts

Over-Investing Risks

1. Liquidity crunch in emergencies
2. Forced withdrawals during market lows
3. High stress impacting decisions

Under-Investing Consequences

• ₹5,000/month SIP → ₹50 lakhs in 20 years
• ₹10,000/month SIP → ₹1.1 Crore in 20 years
  (12% annual returns)

How to Increase SIP Smartly

✅ Annual Raise Strategy: Increase SIP by 10% every year
✅ Windfall Gains: Invest 50% of bonuses in SIP
✅ Expense Cuts: Redirect saved money to SIP

Advanced SIP Strategies

Tax Optimization

• Hold for >1 year (10% LTCG vs 15% STCG)
• Use ₹1 Lakh LTCG exemption wisely

Sector Rotation

• 60% Index ETFs
• 30% Sectoral ETFs (IT, Banking)
• 10% High-Growth Stocks

Conclusion: The Golden SIP Rule

“Invest 20% of income or ₹5,000 (whichever is higher) – increase 10% yearly.”

Next Steps:

1. Calculate your number using 2 methods
2. Start within next 7 days
3. Set annual reminders to increase SIP

FAQs