Everyone has a desire to do something big in life. These desires may be different for everyone, like going somewhere for a trip or buying a car or buying a house or bearing the expenses of children's education etc. Some people also plan for their retirement. But you cannot do all this just by dreaming. For this, it is important that you plan thoughtfully and save regularly. Not only this, it is also important to invest at the right place. In all these cases, your 'target based saving' helps.
Keep an eye on inflation and the time taken to achieve the goal
Your investment can be in property, mutual funds or gold etc. For this, while withdrawing money, you should also keep in mind inflation and the time taken to achieve each goal. These two things will decide how much money you have to save. After setting your goal, the right step is to calculate how much money you will need for it. To understand this, you will need to recognize inflation and the time taken to achieve each goal.
Focus on goal based investment scheme
Policybazaar's Investment Head Vivek Jain says that whether you want to buy your dream house or save for your child's education or you are planning your retirement, for all these you should focus on goal based investment scheme. For example, if you are starting to plan for retirement at the age of 35 and you can set aside Rs 20,000 every month for the next 25 years, then at an average return of 12% in market linked products, you can deposit up to Rs 3.8 crore for retirement. While making goal based investment, you should keep in mind the following things-
Identify your goal and set priorities
First, make a list of all your financial goals. Then, prioritize these goals according to their importance and immediate need. This will help you understand where you should invest your money.
Calculation of the required amount according to the goal
Secondly, find out the amount needed for your goal. It is important to understand how much money you will actually need to achieve each of your goals. For this, you will have to take care of two things. The first is inflation and the second is the time it will take to achieve your target.
Make the right investment according to your target
Depending on the time required to achieve each target and the risk involved, you should invest your money in different places. Low-risk investments are suitable for goals that can be achieved soon. However, you can take a little more risk for distant goals.
Choose the right investment method for your goal
It is beneficial to invest money in different ways for each of your goals. For quick goals, you can choose low-risk investment methods. Such as fixed deposits, short-term bonds, or liquid funds etc. For other long-term goals, you can take a little more risk like you can invest in shares, mutual funds or ETFs.
Review and rebalance regularly
Keep an eye on your goals and investments from time to time. Rebalance your investments as needed. This will ensure that your money is invested according to your changing goals and risk-taking ability.
automatic investment
Start the facility of automatic transfer of money from your salary to the investment account. The advantage of this will be that you are continuously depositing money to achieve your goal. Also, you will not have to worry about this every time.
Be disciplined towards investing
Whatever investment planning you do, always be disciplined towards it. This means that you should invest first when you receive your salary. Also, even if there are fluctuations in the market, do not take any decision based on emotions which may pose any kind of threat to your long term financial goals.
Keep an eye on investments
You have to be cautious while investing. Keep an eye on how your investments made keeping in mind different goals are performing. If needed, change your investment amount or investment strategy so that you do not get away from your goal.
Seek expert advice if needed
If you are having trouble understanding what you should do or where you should invest, you can think about taking advice from any financial advisor. These advisors can help you create a special investment plan according to your goals and risk-taking capacity.
