The other day I met a family who are our clients. The mood was a little sombre because the person had lost his job only a couple of days back.
Fortunately the company promised to give him a salary for the next three months and hopefully within that time frame, he will get the suitable job again.
But since he was in a quite senior position, getting a compatible job is not that easy either. Sometimes it takes more than three months to get the appropriate post.
So the discussion turned into whether the running SIPs should be continued or stopped. They asked my opinion and this is what I told them-
I said that SIPs should be continued simply because-
1) You have three months and this is a reasonable time frame to get a new job.
2) SIPs can be stopped or paused with a 7-10 days’ notice. So if you still need more time, then we can stop the SIPs towards the closer to 3 months.
3) Running SIPs could be the added motivation and positive pressure to search for a good job within the time span. SIP pressure is not only good for your financial goals, it would propel you not to set in any lethargy.
And they agreed to continue their SIPs.
Many investors, in case of any short term financial stress, take the easier route of stopping their SIPs. Whether in case of job loss, purchase of home, requirement of funds for children’s education etc, the easier thing for many people is to stop their SIPs. Also, once the momentum of SIPs goes it doesn’t come back easily. So, even after getting the financial order back to normal, most people don’t restart their SIPs. Therefore, my suggestion is to always continue your SIPs. Yes, there may be a temporary situation of little financial stress but even in such conditions, my humble advice is not to stop all the SIPs. Continue SIP for some amount at least because the habit of disciplined investment is vital for long term financial goals. By continuing your SIPs, you are not only addressing your long term financial goals but also giving yourself a vital message that I am robust enough to continue my quest towards financial freedom.
Yes, SIPs are forever, try never to stop them. They are taking you towards a beautiful world of financial freedom.
Manoj Pandey
CFP
