Dussehra special

This Dussehra, Burn 5 Bad Investment Habits

Five habits that quietly eat into your wealth, and what to do about each one

The calculator for this guide Cost of Delay Calculator See how much waiting a few years before starting your SIP could cost you, using your own figures. Save it as a PDF. Open the calculator →

The Message of Dussehra: Good Always Wins

Dussehra reminds us that no matter how big evil appears, good wins in the end. Ravan's ten heads symbolised ego, greed and poor judgement. Our investment lives also hide a few "Ravans" — bad habits that quietly eat away at our wealth.

Many investors earn well and even save regularly, yet years later find themselves far from their goals. The reason is usually not income but habits: delaying investments, trusting rumours, panicking when markets fall, and making decisions without a plan.

Here are five bad investment habits worth burning this Dussehra.

Habit 1: Delay — "I'll Start Later"

"I'll start once my salary increases", "I'm still young", "I'll invest when the market falls" — these lines are as common as they are costly. The superpower of compounding lies not in the amount but in time. Every year of delay cuts a large slice off your final corpus.

₹10,000 a month until age 60

Same SIP, different starting age

Start at 2535 years · you invest ₹42.00 L₹5.51 Cr

Start at 3030 years · you invest ₹36.00 L₹3.08 Cr

Start at 3525 years · you invest ₹30.00 L₹1.70 Cr

Start at 4020 years · you invest ₹24.00 L₹91.99 L

Amount you investValue at age 60

Starting at 25 instead of 40: ₹4.59 Cr more, for ₹18.00 L more invested.

Notice: the person who starts at 25 invests only ₹18 lakh more than the one who starts at 40, yet ends up with over ₹4.5 crore more. That difference comes not from the extra money, but from the extra 15 years.

What to do this Dussehra:

• Start a SIP today, even with a small amount — ₹500 or ₹1,000 is enough to begin.
• Use a Step-up SIP to raise the amount every year as your income grows.
• Set the auto-debit right after salary day — "invest first, spend later".

Habit 2: Investing on Rumours and "Hot Tips"

A forwarded WhatsApp message, a colleague's "sure-shot tip", a viral social media video — "This fund/stock will double in a year!" Many investors put money in after hearing such claims, without any checking at all.

The problem is that the person spreading the rumour knows nothing about your age, income, risk capacity or goals. A fund that suits them may be completely wrong for you. And quite often, such "tips" come with hidden motives.

Common signs of herd investing:

• Investing only in last year's top-performing fund.
• Believing claims of "guaranteed high returns".
• Jumping into every new NFO or trending theme.

What to do this Dussehra:

• Before investing in any fund, check its 5–10 year track record, riskometer, expense ratio and objective.
• Take guidance only from an AMFI-registered mutual fund distributor or a SEBI-registered adviser.
• Remember: if an offer sounds too good to be true, check it twice.

Habit 3: Panicking and Stopping SIPs When Markets Fall

The market dips, news channels turn red, and many investors immediately stop their SIPs or withdraw their money. This emotional decision often causes the biggest damage — because a paper loss becomes a real loss the moment you sell.

In fact, a falling market is a "sale" for SIP investors. The same ₹10,000 buys you more units. This is called rupee cost averaging — over the long run it lowers your average purchase cost, and when markets recover, those very units deliver the most benefit.

The Indian stock market has seen several major falls — the 2008 global financial crisis, the 2020 COVID crash — and each time, patient long-term investors benefited over time. (Past performance is no guarantee of the future, but it clearly shows the value of discipline.)

What to do this Dussehra:

• Treat equity funds as a 5–7 year minimum investment; ignore short-term ups and downs.
• When markets fall, don't stop your SIP — continue it, or increase it if you can.
• Keep an emergency fund worth 6 months of expenses, so you never have to break investments in a crisis.

Habit 4: Relying Only on FDs and Savings Accounts — Ignoring Inflation

"FDs are safe" — true for your principal, but not for your purchasing power. Inflation is an invisible Ravan that silently erodes the value of your money. At 6% annual inflation, what ₹1 lakh buys today will need about ₹3.21 lakh in 20 years; put the other way, today's ₹1 lakh will be worth only about ₹31,000.

FD interest is also taxed at your slab rate. In the 30% bracket, a 7% FD earns roughly 4.9% after tax — less than inflation.

₹1 lakh after 20 years

The red line is what you need just to keep pace with 6% inflation: ₹3.21 L

Savings account3% a year₹1.81 L

Fixed deposit7%, after 30% tax ≈ 4.9%₹2.60 L

Equity mutual fund12% a year₹9.65 L

The chart makes it clear: both the savings account and the FD stay below the inflation line — the number grew, but the real value fell. Long-term goals (retirement, children's education) need a suitable share of equity. This doesn't mean closing your FDs — they remain useful for emergency funds and short-term goals.

What to do this Dussehra:

• Decide your portfolio's asset allocation — a balance of equity, debt and gold.
• Measure every investment's return after tax and inflation.
• Consider SIPs in diversified mutual funds for long-term goals.

Habit 5: Investing Without Goals — and Never Reviewing

Many investors hold 8–10 different funds, a few insurance policies and some FDs — but ask "What is this investment for?" and there's no answer. Investing without goals is like a journey without a destination: you keep moving, but never know whether you've arrived.

Without a goal, the right amount, the right time horizon and the right fund cannot be decided. And without reviews, underperforming funds, changed needs and unnecessary overlap stay unnoticed for years.

Link every investment to a goal:

What to do this Dussehra:

• Write down your 3–4 key financial goals — with amount and year.
• Give every SIP/investment a goal "name".
• Review your portfolio at least once a year — the run-up to Diwali is a great time for it!

This Dussehra's Financial Resolution

Ravan burns in a single day, but giving up bad habits takes daily discipline. The good news: there is no better day to start than today. Fill in this checklist this Dussehra:

Just as the light of Diwali follows Dussehra, the light of financial prosperity follows once bad habits are gone.

Frequently asked questions

Disclaimer: Mutual fund investments are subject to market risks, read all scheme-related documents carefully. Return figures in this article are illustrative examples, not guarantees. Past performance does not guarantee future results. The Capital Investment — AMFI-registered Mutual Fund Distributor (ARN-129145).