Goals are really important in every individual’s life. People have goals from waking up early in morning or to become Bollywood actor or sportsman. To achieve goals we have to work hard and give ourselves to make the goal real. For people who are new in the investing or who don’t know how to start, goal based investing is way to go.
What is goal based investing?
Goals or financial goals are the money required for known events like retirement, children’s education, marriage or to buy that car of dream. So you start saving little money in the form of SIP( Systematic investment plan) and wait for your money to grow. Once you have enough money, you buy new car and have a destination wedding.
Factors to be considered while selecting financial goals
- Time frame
Number of years available to achieve goals. If you are 25 years old and you will be retiring at age of 60 so you have 35 years and you can start saving with less money but you will see great result in the long run.
- Mutual funds
There are multiple types of mutual funds and you should do some research before selecting a mutual fund for your goals. Just to give you an example check for 5 years rate of return instead of 6 months or 1 year.
- Priorities of goals
This is more personal to every individual. I will suggest you to prioritize your goals between short term benefit vs long term benefit
- Financial advisor
Choose correct financial advisor. You can search on Google about everything and become your own advisor or you can pay a fee and get advice on achieving your goals.
Risk is a factor which is not in control of any one. But if you research properly or choose right financial advisor, your risk will be minimized. By the way there is risk in everything but still we do it.
So I can say that start early, focused on goals, choose right funds, be patient and don’t get panic with markets ups and downs. You can easily achieve all yours goals.
What you think about Goal based investing? Tell us in the comment