FINANCIAL PLANNING AND GOAL BASED INVESTMENT

 FINANCIAL PLANNING AND GOAL BASED INVESTMENT


Goal based Investment

 


Proper financial planning should be always related to goal-based investment. You have to be capable of forecasting your income, expenses, tax planning, and the tax to pay for the next year.

If you are relying on a single income, say it a corporate job. You should know your monthly income. How much you are spending on your needs, wants. Finally, how much you are saving.

In savings, what is the split of different investments? You have to understand that keeping your funds in Bank, FR or RD is not an investment, it is just a saving.

 

DECIDE YOUR GOAL:


          A Goal without a deadline is termed to be just a daydream. There is a difference between a daydream and a dream. So, whenever you plan a goal fix it with a timeline to achieve. Always, try to achieve your goals before the timeline.

          While you set a self-target on your goals and investments with your financial planning, this makes the best version of yourself.

          This can be a set example of your generation, how to handle money. This is the best financial literacy you can teach them to live.

          Goals can be varied from person to person. But, there are always common goals like retirement, car, dream home, and child marriage. There are many short term goals that all people have, let me don’t discuss here.

          I will just take you all through the common goals and the asset class to achieve them in the estimated delivery date.

 
ASSET CLASS WITH DURATION OF INVESTMENTS:

          There are many assets classes available, and every asset class will work depending on the runway of investments.

          The Duration of investment can be split of short – term (1-5 Years), mid-term (6-10 Years), long Term (more than 10 Years) in financial planning.

          The class are Debtfunds, Bonds, Equity Mutual Funds, Shares, PPF, EPF, and other fixed-income components.

          When you need a fund within 5 years, please avoid equity. The assets class should be liquid funds, ultra-short funds, and another low risk

          So, segregate your goal and assets class. Please find the image below,


Goal based Investment - Asset Class


 

The above image is a small example of how we can match our financial planning goal-based investment towards asset classes available.

Once, you select the asset class for a particular goal. Match the exact asset class towards your goal and start investing every month.

The most important here is analyzing and updating your asset goals.

 

UPDATING INVESTMENTS AND ANALYZING:

          This can be done with a help of a MS Excel sheets. By which you can have a clear idea of how much you have in your investments.

          How much you need to achieve the dream, how many years of tenure still behind to reach.

          Regular updating of the portfolio will make clarity on the performance of the investments.

         

Financial Planning - Goal Based Inestment

This image should have reminded you how you can have a best practice in maintain your investments aligned to your goals, also regularly follow-ups.

          When you do regular recap every month on this format, you will be very much confident in achieving your goals.

          Do you know, it is always a tougher one till you invest your 1st 10 lakhs. After which it will become a habit.

 

CONCLUSION:

·       The best method of financial planning is a goal-based investment.

·       You have to choose your dream, the tenure, and matching them to the asset class.

·       The asset class chose has to be maintained until achieving the goals

·       The goal-based investments has to be updated and reviewed every month.

·       When you segregate your asset class with your goals, you can find where your maximum share of investments should be parked.

·       In financial planning, goal-based investment is the advanced method to achieve all your goals. This make  investments a sweet habit in life

 

Wishing you all a happy investing.

 

 

         

 

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