Deepak Shenoy challenges traditional views on SIPs, emphasising their alignment with monthly earning and spending cycles for better disciplined investing and wealth building.
Deepak Shenoy has argued that the real case for systematic investing is less about market timing and more about how most people actually earn money: in monthly instalments. The Capitalmind chief executive said that for salaried workers and others with steady cash flow, a systematic investment plan, or SIP, mirrors the natural rhythm of income, spending, saving and investing, making it easier to turn part of each pay cheque into a habit rather than a decision.
That view cuts against one of the mutual fund industry’s most common selling points. SIPs are often promoted as a way to smooth out entry prices through rupee-cost averaging, which means buying more units when markets are weak and fewer when they are strong. But Shenoy said that effect is better understood as a by-product than the main purpose. In a post on X, he said: “The main reason an SIP is useful is not because it “averages” out the entry price over time in a volatile up and down market. That is just something we as an industry decided is a good thing – but it’s an outcome, not a goal. The main reason is: most of us earn money monthly. End of story. You earn, you spend, you save, you invest. That cycle happens monthly, and therefore you SIP monthly.”
He also pointed to the behavioural edge of investing first and spending later. If money is left sitting in a bank account, it is often easier to spend it, while an automatic monthly transfer turns saving into a form of forced discipline. In the same post, Shenoy said: “But the secondary reason is also: if you don’t invest it, you probably will spend it. This is why SIPs make sense – you invest first and spend later, usually. So you end up spending only what’s left with you, and that “forced” investing of sorts helps you build wealth for later. Many of us have the discipline to do an SIP manually every month – otherwise called “lumpsum” investing. This is also fine, and probably better because some months you will have way more money, and some you will be on kadki mode.”
The broader context helps explain why SIPs remain so popular. Business Today said SIP flows have reached about ₹31,000 crore a month, while other industry trackers have put monthly inflows at roughly the same level in recent months. That scale reflects both the appeal of regular investing and the accessibility of mutual funds to small savers. Industry guides from firms including Paisabazaar, ET Money and HDFC Bank also note that SIPs can help investors build discipline, benefit from long-term compounding and start with modest amounts. Shenoy’s point, however, is that the first stage of wealth building is still the hardest: in the early years, investors’ own savings matter far more than market returns. The aim, he suggested, is not merely to accumulate a growing account balance, but eventually to turn that money into something useful in real life.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
