This precarious situation is compelling them to explore saving options that not only help them sail through troubled water in the future but also assist in building some capital by harnessing the power of compounding.
Additionally, their unpredictable and irregular income cycles make it even more crucial for gig workers to prioritise savings and embrace disciplined investment practices such as Systematic Investment Plan (SIP).
A method of investing small, fixed amounts into mutual funds on a regular basis, SIP, can be a game changer for millions of Indian freelance workers. By harnessing the twin power of compounding and cost averaging, these investment tools can help investors to navigate volatility of any kind while ensuring that their investments are able to beat inflation in the long-run.
The one of biggest advantage of using SIP is that even smaller investments can grow substantially over time. More importantly, it instils discipline in the investor at an early stage. If your income increases, you can either increase the SIP size or probably add other granular SIPs. One of the standout features of SIPs is that they are very flexible and can be customized to your unique needs.
For instance, putting away a small sum of money every month may help you in amassing a sizeable savings cushion, and if you remain patient for some more time, it may provide you with financial stability in the long run. Historical data also proves that long-term SIPs yield significantly higher returns, reinforcing the importance of patience in wealth creation.
Moreover, as most self-employed people are prone to the volatility of business cycles, SIPs offer a counterbalance by spreading investments over time and averaging costs, cushioning the impact of market swings and removes the stress of timing investments, making it a powerful wealth-building tool for freelancers and entrepreneurs.
Besides this, for millions of freelance workers in the country, SIP gives much more than just good returns, it instils a sense of financial security and independence to them.
As India’s self-employed is expected to grow further, supported by the projected surge in e-commerce and quick commerce segment, SIP can help them in addressing financial security challenges by tapping into the power of compounding to steadily build long-term wealth.
Source: How India’s Self-Employed (Freelance / Gig-workers) Can Build Wealth Through SIPs
