Increasing Investment Each Year

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A lot of people here on Hive have written about their Financial Goals for 2021 and one thing is common in all the posts is that we all want to become financially strong and financially free in some point in our life. I actually love the fact that people do set their financial goals and they take action to fulfil it.

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We should be consistent in your approach to get the maximum outcome of our goals but again if we miss the goal this year it should be done next year. But the catch here is we have to increase our investment next year to fulfil 2-year goal. This is where increasing investment each year should be done.

There is a concept in SIP is step-up SIP where you can increase the SIP money 10% every year. But the problem with that approach is you don't know whether your salary will rise 10% every year to match up with the investment amount. Most of the people get 4-5% hike and thus your expense increases every year because of the high inflation.

Though there is uncertainty, we can invest what we can. But what matters is consistency, investing as much as possible and increasing investment as much as possible even if it's 1%. We all start small but if you remain invested as well as if you increase the investment every year that small will become huge money one day.

The problem I see is that we compare the return and thus based on that we change our strategy about how much to invest, but the main thing is that we should always consider how much we can invest and thus 10 years down the line how much I have invested because the return will follow your investment. If you have invested more there will be more returns whereas if you have invested less you will get fewer returns (talking about SIP in Mutual fund).

So in conclusion I think investing as much as we can as well as increasing investment every year should be the mantra for getting the financial goals of 2021 or of any subsequent years.

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