Building long term investing muscle

What do exercise and investing have in common? A lot if you look closely!

Did 2021 start for you with a resolution to be more active and start exercising? Well, ours did too! But while we were making those resolutions, we realized that exercise and investing have a common thread that helps us understand how one can be a successful investor while building that dream physique. So, let’s start, shall we?

First & Foremost, make a beginning

Do you know why exercising is always the most sought-after resolution for a lot of people every new year? It’s because while everyone wants to do it, very few people start it. The same is the case with investing. Putting it off to the future has never helped anyone. Hence, start investing and exercising today, not tomorrow.

Consistency matters

Going to the gym on 1st January and stopping right after that will make no difference to your health goals. Continuing with your exercise regularly, is the only way to reach your goal. Similarly, investing via SIPs regularly and staying consistent with it will help you create substantial wealth over the long term.

Here’s why consistency plays an important role :

Let us say you start a monthly SIP of 5,000 and decide to continue it for 20 years. You get a return of 12% on this investment. At the end of 20 years, you would have created a total wealth of almost 50 Lakhs. This shows that consistently investing 5,000 each month can lead to a big amount over long term.

Find a routine that works for you

When you start working out regularly, you also try and find the best exercise routine for yourself. It could be weight training for building muscle, cardio for weight loss or pilates for core strength. In short, you make sure you do a mix of exercises to suit your goal. With investments as well, you need to make sure that you invest in funds that suit your risk preferences, goal, and the time period for which you need to stay invested.

What happens if you invest in a very high-risk investment to meet very short-term goal? Your investment will go through too many ups and downs resulting in some loss and a lot of stress. But it’s easy to avoid this by simply investing in funds that suit your requirements. Here’s a short guide based on the investment period and different risk profiles:

There are no shortcuts, but long term results can be extraordinary

Exercise is a long term process. It takes time to see the results but once you get closer to your goal, there is no looking back. Likewise, when it comes to investments, there are no shortcuts. If you look for quick profits, you may get disappointed but investing for the long term via SIPs is a great way to build your investments in a slow and steady manner.

Lastly, let’s take a cue from a famous quote extolling the virtues of exercising that is apt for investing as well: “Do something today that your future self will thank you for”.

Disclaimer: Mutual Fund investments are subject to market risk. Please read the scheme information document carefully before investing.

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