What does "goal-based investments" mean?
The majority of Indian investors don't handle their savings and investments in an organised way. The majority of people don't set savings goals because their spending patterns determine how much they can actually save.
Every person has financial objectives that must be met in the short, medium, or long term. Goal-based investing refers to consistently making investments in order to achieve the desired financial goal. A short-term objective would be, for instance, planning to purchase a car within the next two to three years. Similarly, planning for your future and your children's further education might be categorised as long-term goals.
How do you make financial goals plans?
You must first be aware of the numerous financial objectives you hope to accomplish throughout a range of time frames. The timeframe you have to accomplish those goals must then be calculated. Work out the current cost of all of these goals if you are clear on the target and the time range. You may now calculate the potential value of your goal by adding inflation to the present cost.
Retirement, children's education, and marriage are a few of the common financial targets which you might need to plan for. Vacation savings, short- to medium-term vehicle or home purchases, tax savings, and regular cash flows / income planning.
How mutual fund investing can assist in achieving these objectives
Based on your risk tolerance and time horizon, mutual funds are excellent investment options for a wide range of financial goals. To achieve your aims, you can employ a variety of mutual funds with various investing goals. We'll examine some of the best mutual fund choices for these objectives.
- Equity funds
- Debt money
- Hybrid funds
- Mutual funds ELSS
For investors with specific goals, mutual funds offer a versatile investing alternative.
You can invest in mutual funds either in a flat payment or through systematic investing strategies to help you achieve your varied financial goals (SIP). SIP is the best option for investing because you may make regular investments, like once a month, for each of your investing goals. You may follow the progress of each objective and determine how much you have accomplished in relation to a certain goal at any time by using SIP for each of the goals separately. Your SIP investments can also enable you adjust the amounts in accordance with your shifting financial circumstances, such as annual salary increases. Your financial objectives can be attained more quickly if you raise your SIP contribution each year.
