Missed Starting SIPs Early? This Simple Strategy Can Still Help You Earn Rs 41 Lakhs More

Rahul and Raj, known among friends as the modern-day Jai and Veeru of Sholay fame, shared a bond forged in their humble beginnings and strengthened during their engineering days. The iconic Bollywood film Sholay, released in the mid-1970s, might have given us legendary dialogues, but these two gave their batch a story of brotherhood and ambition.

Both cracked their way into high-paying software jobs in 2005, drawing almost identical salaries. Around this time, the 50/30/20 personal finance rule—allocate 50% to essentials, 30% to lifestyle choices, and 20% to savings—was gaining popularity. Rahul took it to heart, but with a twist.

Rahul, ever the minimalist, didn’t dine out often, kept shopping to a bare minimum, and managed his groceries with an almost monk-like discipline. As a result, he had the capacity to save 40% of his income. Right from his first paycheck, he invested 35% into SIPs (Systematic Investment Plans) in mutual funds and kept the remaining 5% for emergencies.

Raj, meanwhile—naam toh suna hi hoga!—was the life of every party. Weekends meant travel, dinners, and hangouts. He managed to save only 10% of his salary, which he diligently parked in fixed deposits. Investments? Not much beyond that.

By 2010, five years into their careers, Rahul could already see the fruits of his disciplined SIPs. His investments had grown steadily, and he was confident of building a robust future corpus. Raj, on the other hand, after years of fun and freedom, had a moment of reckoning. His FDs were stable but uninspiring, and the realization dawned that they wouldn’t be enough to build long-term wealth.

As friends and colleagues praised Rahul’s early-start advantage, Raj found himself the butt of jokes and unsolicited financial wisdom. Tired of the noise and driven by the desire to course-correct, he reached out to his cousin—a financial advisor—for help.

In their conversation, Raj mentioned two important things: First, he was about to receive a sizeable bonus from his employer as a loyalty reward for five years of service. Second, he had built up a decent reserve in FDs. The cumulative amount? A hefty Rs 10 lakh.

His cousin saw a window of opportunity. “You can’t turn back time,” he said, “but you can make it work for you.” His advice was simple yet powerful—start with a Rs 10 lakh lump sum investment in a Small-Cap fund and begin a monthly SIP of Rs 7,800. Small-cap funds, he explained, may be more volatile in the short term, but they have the potential to deliver strong long-term returns—especially for someone young, with time and patience on their side. 

Given his age, appetite for risk, and the years ahead to ride out market ups and downs, small-caps offered the best chance to grow wealth meaningfully over time.

So, while Rahul continued with his disciplined SIPs and used his bonuses for lifestyle upgrades—like buying a luxurious car—Raj went all-in. His strategy now had two engines: a lump sum booster and a SIP discipline.

Fast forward to 2025—here’s what happened:

Raj’s Late-Starter Strategy: Lumpsum + SIP in Small-Caps

Despite starting late, Raj chose to make up for it with a one-time lump sum investment of Rs 10 lakh and a monthly SIP of Rs 7,800, opting to invest in a small-cap fund.

• Lump sum investment: Rs 10 lakh
• SIP: Rs 7,800/month for 15 years
• Total investment: Rs 24 lakh
• Corpus in 2025: Rs 1.97 crore
• CAGR: 18.71 per cent 

Note: For illustration sake we have used Quant Small Cap Flexi Fund. However, this is not a recommendation and should not be construed as one.  

Source: Value Research 

Rahul’s Formula: Start Early, Stay Consistent, Let Compounding Work

• SIP: Rs 10,000/month for 20 years
• Total investment: Rs 24 lakh
• Corpus in 2025: Rs 1.56 crore
• CAGR: 16.29%

Source: Value Research 

Note: For illustration sake we have used HDFC Flexicap Fund. However, this is not a recommendation and should not be construed as one.  

Both were disciplined, both were consistent. Yet, Raj’s decision to inject a “nitro booster” via lump sum investment and choosing small-cap mutual fund gave his corpus a rocket-like lift—growing to nearly Rs 2 crore, which is greater by Rs 41 lakh  that of Rahul’s by 2025.

In Conclusion

We often hear that the earlier you start, the better your chances. And while that’s mostly true, Raj’s story adds an interesting twist. Rahul did everything by the book—started early, stayed disciplined, and invested consistently. But Raj, despite starting much later, chose a more aggressive path—bringing in a sizable lump sum and backing it with a SIP in small-caps. His strategy wasn’t about chasing returns, but about making the most of the time he had left.

The result? They both put in the same amount, but Raj ended up with a bigger corpus. It just goes to show—being regular is important, but how you invest and when you act matters too. Sometimes, it’s not about starting early—it’s about making the right moves when you finally do.

Disclaimer: The article is for informational purposes only and not investment advice.