Achieve goal-based investments to achieve your financial goals

2019-04-09 Investing No comment

Life is about setting different goals and achieving goals one by one. As Tony Robbins said, setting goals is the first step in making invisibility visible. When every rupee you invest in has a clear purpose behind it, it is called a goal-based investment.

Goal-based financial planning is for long-term, medium-term, and short-term gains. Long-term plans often generate more wealth than the other two. The medium-term plan may be to buy a house with a short-term plan that may have a car.

The difference between it and traditional methods


Unlike traditional investment methods, goal-based investments focus not only on your risk profile, but also on achieving your goals. The investment plan should be designed by keeping the goal at the center.

The traditional approach remains focused on selecting areas that ensure safe return. It found a safe and reliable way to make money. However, in goal-based investments, the achievement of goals determines their ultimate success. Wealth generation is not the only goal.

A goal-based investment plan can only be achieved after a detailed study of the investor's net assets, risk tolerance levels and financial objectives. In the case of traditional methods, the risk quotient is first calculated and selected according to a pre-designed investment plane.

Benefits of goal-based investments

In life, every rupee you spend is a type of investment that can bring you some results. If your target investments are planned, well thought out and working to achieve specific goals, then they will not affect each other. The benefits of a goal-based investment are –


It allows you to implement a better approach to fund management in a systematic way.


This is just a good habit to limit the excitement you make when you buy.


Use your financial resources to build value assets and wealth through appropriate financial planning.


Improve the achievability of your financial goals in your life.


You can continuously monitor and change your plans to get closer to your desired financial goals.

How to plan for a goal-based investment

Planning for goal-based investment needs –


You must list the important life goals you need to achieve. You should prioritize them based on their importance.


Analyze your funding needs. It will help you focus your investment based on upcoming life events.


Divide your investment into three parts – 1] short term, 2] medium term and 3] long term.


Now choose the right investment plan and start investing.

The short-term goal-based investment is to meet the upcoming requirements that will emerge in the next two years. You need to invest in areas that are less volatile and less risky because you need to turn it into a liquid as soon as possible.

Medium-term target investment is an investment that you need to get a return in the next 3 to 10 years. Long-term goals may include retirement and higher education for children. In order to achieve this goal, you need to accumulate large corpora. To do this, you must work hard to identify a predetermined asset class and make a systematic investment over a longer period of time. As time goes by, no matter how short-term market turmoil, you should continue to invest in your plan.

If you link financial investments to time frames and specific life goals, it will be much easier to implement.

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