Investing
The arithmetic of investing is simple and public. These guides show it, so you can check the numbers anyone quotes you.
Investing has a small amount of mathematics and a large amount of behaviour. The mathematics is genuinely simple — compounding, a monthly instalment, an assumed rate — and it is written out in full in these guides so that you can reproduce any figure yourself rather than trusting a calculator, including ours.
The behaviour is where outcomes are actually decided. The difference between a portfolio held through a 30% drawdown and the same portfolio sold at the bottom is far larger than the difference between any two sensible asset allocations. That is why every allocation on this site is checked against your time horizon, not only your stated appetite for risk: appetite is what you feel in a calm month, horizon is a fact.
Nothing on FinatriX is investment advice, and no specific fund, stock or product is ever named as a recommendation. These pages explain mechanisms — what a SIP is, how allocation changes an outcome, what an expense ratio costs over twenty years — so that you can evaluate a real product yourself or ask a registered adviser a better question.
Key terms
- SIP (Systematic Investment Plan)
- A fixed amount invested at a fixed interval, usually monthly, into a mutual fund. It is a schedule, not an asset class — a SIP into an equity fund carries equity risk in full. Its advantage is that it removes the decision of when to invest, which is the decision people get most wrong.
- Asset allocation
- How money is divided between asset categories — equity, debt, gold, cash. It explains most of the variation in a portfolio's return and almost all of the variation in how much it falls in a bad year.
- Compounding
- Returns earning returns. Its effect is not linear: over a 25-year horizon at 11%, most of the final balance is growth on growth rather than on the money you contributed, which is why starting date matters more than instalment size.
- Volatility and risk
- Volatility is how much a value moves about. Risk is the chance of not having the money when you need it. Over a long horizon they diverge sharply: a volatile asset can be low-risk for a 20-year goal, and a stable one can be high-risk if it never beats inflation.
- Expense ratio
- The annual percentage a fund charges on assets. It looks trivial and compounds like everything else: 1% a year on a 25-year SIP typically removes a mid-teens percentage of the final corpus.
Frequently asked questions
How much should I invest every month?
Work backwards from the goal rather than forwards from what feels affordable. A target amount and a horizon determine the required monthly instalment through the future-value formula for a series of payments — the Reverse Goal Planner solves exactly this. The answer you can actually sustain every month for the whole horizon beats a larger one you abandon in month seven.
Is a SIP safe?
A SIP is a payment schedule, not a safety feature. It carries whatever risk the underlying fund carries — an equity SIP can and does fall 30% or more in a bad year. What a SIP genuinely does is spread your entry price over time and remove the temptation to wait for a better moment, which historically costs more than it saves.
What return should I assume for planning?
Use a long-run assumption for the asset mix and treat it as illustrative, not as a forecast. FinatriX models conservative, moderate and aggressive paths and shows the assumed rate for each on the page. Any single number is wrong; the value of the exercise is seeing how much the answer moves when the rate does.
Should my allocation change as the goal gets closer?
Yes, and this is the mechanical part of investing that most reliably prevents damage. Volatility that is survivable over fifteen years is not survivable over two, so the equity share should fall as the date approaches regardless of how comfortable you feel. InvestMatch downgrades allocation on horizon for this reason, even when the stated risk appetite is high.