Mutual Funds Awareness 105: SIP is good, but will you have a job till then?
SIPs (Systematic Investment Plans) are the best companions for salaried employees. Without active involvement, many of them end up creating generational wealth. All they need to do is save 15 to 20% every month via SIPs and in 10 to 15 years, they would end up creating a corpus that could compensate 50% of their active income.
This plan worked amazingly well for the job goers of the 2000 to 2010s, as they had relatively stable jobs. This situation does not apply to employees who are currently being added to the payroll. Already, Artificial Intelligence (AI) is making many jobs redundant.
Checkout this article on Forbes — 21 jobs that will disappear by 2030.
https://www.forbes.com/sites/rachelwells/2025/04/16/21-job-titles-that-will-disappear-by-2030/
If you take a step back and think, what is happening is in line with the information technology revolution. Most of the jobs that are going redundant are the ones replaced by AI or machine learning, and honestly, AI does a better job than humans.
If your current work profile can be replaced with better technology or AI, you need to be mentally prepared to move on soon.
People with high job insecurity often struggle to maintain a regular investment pattern. Even though they start a SIP, it is unlikely that they will be able to maintain it during their tough times. This puts pressure on their ability to create assets.
Assets will only give you income if they are created 100%. A half-created asset is more of a liability than an income-generating tool. Think of a house half-constructed — you will not be able to generate income from that, but you may have to continue paying your EMIs on housing loans.
When you start a SIP, you need to keep your foot on the accelerator pedal till the corpus is entirely created. If you stop it halfway, you may not get the expected yield. The portfolio may be in the red halfway through the investment tenure, as the power of compounding has not yet begun its magic. So when you withdraw prematurely, you are doing more harm than good.
If you are aware of the nature of your job and anticipate a maximum of 5 to 7 years before facing the axe, please inform your advisor accordingly. They will create a plan to increase your passive income levels within this short period. You may need to save an additional 50% of your original SIP outgo to meet this new goal. If your earlier SIP outgo was Rs40000 per month, you might have to revise it to Rs40000+50% = Rs60000 per month.
The second option is to start with a normal SIP now and then switch to irregular lumpsums if you are going through job challenges. Irregular lumpsums are what the self-employed and small business owners do, i.e. contribute on months when they have an excess income and skip when they have not made enough. SIP is just one of the ways to invest in a mutual fund. If you are a disciplined investor, lumpsum investments will work equally well; you just need to be actively involved to make these purchase decisions.
These decisions are best left to a qualified financial advisor or retirement planner. They would have worked with 100s of similar cases and steered them to a safe zone. You too can prepare a draft plan before meeting one so that the advises you are taking are inline with your expectations.
In 5 or 10 years from now, even if the nature of “jobs” is changing from “regular income” to “gig income”, it is improbable that you would be without an income source. If you are skilled and at the top of your field, you would always have an active income source; it’s just that it may not be a regular income. Always remember, our ancestors were all self-employed or gig workers before the Industrial Revolution.
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https://www.forbes.com/sites/rachelwells/2025/04/16/21-job-titles-that-will-disappear-by-2030/