Every investor has seen those attractive posters that promise financial freedom through small monthly SIPs. The idea sounds simple and comforting: invest a few thousand rupees every month and become a millionaire in a few decades. But a growing number of financial experts are now questioning whether this story tells the full truth. One such warning came from CA Nitin Kaushik, who argues that the popular “SIP to Rs 1 crore” narrative hides more complexity than it reveals.
CA Nitin Kaushik recently took to X to break down what he calls a “mathematical fairy tale” often used in investment marketing. He pointed out that the commonly quoted example suggests that investing Rs 5,000 per month at 12 per cent annual returns for 30 years leads to a corpus of around Rs 1.7 crore. On paper, it looks clean, predictable, and almost effortless.
But according to him, this projection ignores one major factor: inflation. Kaushik explained that while the numbers may appear impressive in isolation, the real purchasing power of that future Rs 1 crore is very different from what people assume today. Over decades, inflation quietly reduces the value of money, shifting the “goalpost” far ahead of where most investors expect it to be.
He warned that many people start SIPs believing the outcome is fixed, only to realise much later that their financial needs have grown much faster than their investments. Another issue he highlighted is market volatility, which is often ignored in simplified projections.
He noted that compounding is never smooth or linear. Instead, investment journeys typically include long periods of stagnation, sudden drops, and phases of recovery. Kaushik explained that within an 8-year cycle, investors can expect multiple years of flat returns and at least one year where portfolios may fall by 20 to 30 per cent. These fluctuations are a normal part of equity investing but are rarely included in marketing illustrations.
He also pointed out a common behavioural mistake among investors. Many people start SIPs during strong market rallies when confidence is high. However, the same investors often stop their SIPs when markets turn negative, just when compounding needs consistency the most. In doing so, they unintentionally break the very system meant to build long-term wealth.
Kaushik stressed that this is where discipline matters more than prediction. He argued that a flat SIP alone is not enough in the long run because it fails to keep pace with rising income and lifestyle inflation. According to him, if a person’s salary increases by 10 per cent every year but their SIP remains unchanged, they are effectively investing a smaller share of their income over time. This weakens long-term wealth creation potential.
He suggested that the real power of SIPs comes from gradual increases in investment amounts. Kaushik noted that increasing SIP contributions by even 10 per cent annually can more than double the final corpus compared to a static SIP over a 20-year period. This simple adjustment significantly strengthens compounding over time.
He reminded investors that a SIP is not a guaranteed wealth machine but a financial tool that requires discipline, patience, and consistency.
According to him, true wealth building requires the ability to continue investing even during market crashes, such as sharp Nifty corrections, without panicking or stopping contributions. Kaushik also urged investors to shift their focus away from headline numbers like “Rs 1 crore” projections. Instead, he recommended paying attention to real returns after adjusting for inflation and taxes, as these figures more accurately reflect future financial freedom.
He summed up his message by saying that wealth creation is not about chasing simplified targets, but about building a mindset that survives market cycles and steadily increases investment capacity over time. The core takeaway from his warning is clear: SIPs work, but only when investors understand the real-world forces that shape long-term returns.
CA Nitin Kaushik recently took to X to break down what he calls a “mathematical fairy tale” often used in investment marketing. He pointed out that the commonly quoted example suggests that investing Rs 5,000 per month at 12 per cent annual returns for 30 years leads to a corpus of around Rs 1.7 crore. On paper, it looks clean, predictable, and almost effortless.
But according to him, this projection ignores one major factor: inflation. Kaushik explained that while the numbers may appear impressive in isolation, the real purchasing power of that future Rs 1 crore is very different from what people assume today. Over decades, inflation quietly reduces the value of money, shifting the “goalpost” far ahead of where most investors expect it to be.
He warned that many people start SIPs believing the outcome is fixed, only to realise much later that their financial needs have grown much faster than their investments. Another issue he highlighted is market volatility, which is often ignored in simplified projections.
He noted that compounding is never smooth or linear. Instead, investment journeys typically include long periods of stagnation, sudden drops, and phases of recovery. Kaushik explained that within an 8-year cycle, investors can expect multiple years of flat returns and at least one year where portfolios may fall by 20 to 30 per cent. These fluctuations are a normal part of equity investing but are rarely included in marketing illustrations.
He also pointed out a common behavioural mistake among investors. Many people start SIPs during strong market rallies when confidence is high. However, the same investors often stop their SIPs when markets turn negative, just when compounding needs consistency the most. In doing so, they unintentionally break the very system meant to build long-term wealth.
Kaushik stressed that this is where discipline matters more than prediction. He argued that a flat SIP alone is not enough in the long run because it fails to keep pace with rising income and lifestyle inflation. According to him, if a person’s salary increases by 10 per cent every year but their SIP remains unchanged, they are effectively investing a smaller share of their income over time. This weakens long-term wealth creation potential.
He suggested that the real power of SIPs comes from gradual increases in investment amounts. Kaushik noted that increasing SIP contributions by even 10 per cent annually can more than double the final corpus compared to a static SIP over a 20-year period. This simple adjustment significantly strengthens compounding over time.
He reminded investors that a SIP is not a guaranteed wealth machine but a financial tool that requires discipline, patience, and consistency.
According to him, true wealth building requires the ability to continue investing even during market crashes, such as sharp Nifty corrections, without panicking or stopping contributions. Kaushik also urged investors to shift their focus away from headline numbers like “Rs 1 crore” projections. Instead, he recommended paying attention to real returns after adjusting for inflation and taxes, as these figures more accurately reflect future financial freedom.
He summed up his message by saying that wealth creation is not about chasing simplified targets, but about building a mindset that survives market cycles and steadily increases investment capacity over time. The core takeaway from his warning is clear: SIPs work, but only when investors understand the real-world forces that shape long-term returns.
