Every individual has his/her own ambitions and aspirations. However, majority invests in a haphazard method. Planning as per targets is not taken seriously by many. Investment based on target guides you.
A meticulous procedure for investing displaying the intent behind each penny getting invested is called goal based investing. It views your existing assets, expense patterns, risk profile, asset allocation and the varied short, medium and long-term goals thus forging a map for each target in a moderately foreseeable aspect.
There are two parts to it. They are Planning and Investing. How much capital you require to fund the goal and how much capital to invest regularly for receiving the amount you seek is determined by goal planning. Investing that amount in a reasonable product assists you accomplish the target with little difficulty.
Evaluate your current financial situation before you set your target. This involves grasping what you want to do with your capital and how you want your monetary future to look like. There are three time frames for goal-based planning. They are:
Short term goals:
Timeframe up to a year and covers goals like purchasing a new car or going abroad for a vacation in the near future.
A timeframe of one year to five years. It covers goals like purchasing a house or commencing a new business.
Timeframe exceeds five years. This includes goals like retirement planning and so on.
Why should it be done like this? That’s because if you don’t know where you’re headed to, any road will take you there. Only great sages and saints who have renounced the world and have left all desires to seek salvation will go anywhere without knowing where they are headed to.
The approach of heading anywhere without a specific goal is futile and dangerous in the financial world as going aimlessly will make you lose your money!!
Every drop of water contributes to making an ocean! The earlier you start, the more time you will have to invest. Keep your investments planned as per your financial condition.
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