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Invest Like a Tortoise – Slow & Steady

If you had to choose between the hare or the tortoise, which would you choose? I imagine that most of us would want to be the hare. If I could be the hare, all I would have to do, is to have the sense not to stop till the end. It seems so easy, and yet there’s a reason this story is widely told. It’s easy to tell myself that I shouldn’t invest because it’s risky or because I’m so new to it that I can’t possibly excel. But what this story teaches us is that slow, but consistent, effort can be just as successful as speed and skill.

If you’ve read my Soulennial blogs so far, you know I’ve thought a lot about how and why I want to invest money in index funds. You know that I’m not aiming to be the Michael Phelps of investing and that I prefer to have a low-maintenance approach to investing a.k.a the Cactus Approach , but I still want to make smart financial decisions. What may not be clear yet is why aiming for average success with minimal effort is still a solid strategy.

It can be overwhelming to decide how much and how often I want to invest. It’s so common to hear of people who lost everything when the stock market crashed. When is the right time? Should I wait for the market to go down a bit? What if I invest too little and don’t end up making much of a return on it?

Let’s start with when. Unless I’m a magic genie who can foresee the future, it is impossible to accurately time the market. I will never know for sure if the market will stay up/go further up/crash/etc. Accepting that this is out of my control, the best option is a Systematic Investment Plan (SIP). An SIP allows you invest a small amount of money (even INR 500) at a frequency of your choosing (weekly/bi-weekly/monthly/quarterly). Why is this a good idea?

Flexibility – You can start/stop/increase/decrease an SIP at any point depending on your financial situation.
Discipline – The regularity of SIPs will get you in the habit of saving and investing.
Rupee Cost Averaging –By fixing the amount you put in, you take away the worry about timing the market. Your SIP amount gets you more units when the markets are down and less units when the market is inflated.

Most importantly, having a consistent amount invested regularly makes it easier to separate your emotions from it. Closely watching the regular ups and downs of the market can make it hard to think long-term. SIPs make it convenient to stay invested, without making impulsive decisions, allowing me allowing me to ride out market crashes and high volatility with ease.

Now to the question of how much. Like with any New Year’s resolution, there is the temptation to do a lot immediately. I will run 5k every day, read 5 books in a month, etc. And like every gym member knows, by February, all this momentum and motivation fades away because the effort was simply too much to sustain. Similarly, it is important to start off small with a SIP. Keeping the amount small makes it that much easier to keep it going.

Like the hare, it can be easy to feel like there’s plenty of time so why rush now. Or that things are working fine now with an FD so why bother doing more. Investing has been on my to-do list for years, but it always felt like too much of a hassle and not urgent enough. However, take a look at the numbers and you see a different story.

If I start a monthly SIP of ₹3000 today, in 30 years I would have earned ₹1 crore* including my investment of ₹10.8 lakhs. Now this time frame and amount may not be right for everyone. But with a little adjustment to the SIP amount or time frame, the below table shows that a solid return is still doable.

Monthly SIP Amount	Time Frame	Total Investment	Estimated Return*	Total Value
1000	30 years	3.6 lakhs	~32 lakhs	~35 lakhs
5000	15 years	9 lakhs	~16 lakhs	~25 lakhs
3000	30 years	10.8 lakhs	~95 lakhs	~1.05 crore

*This assumes a 12% retum rate, which is standard for a time frame over 10 years. Figures shown above are taken form the Growy SIP calculator.

Clearly the longer the timeframe, the less I will have to invest to see high returns, which means starting now is absolutely essential at any age. Rather than being the hare who can afford a late start, I should start now with small, slow tortoise steps. And the best part is that it’s completely customizable to my personal requirements. Check out this helpful SIP calculator from Groww to see what your preferred amount can earn you over different timeframes.

If investing was the race between the hare and tortoise, of course it’s nice to have the speed and skill of the hare, but having a SIP in index funds means that my money will slowly, but surely, make its way to the finish line.