Goal Based Investing

Everyone has different financial goals in his life, some have  short term goals like creation of Emergency Fund, Arrangement of down payment for Purchase of Home/Car etc.,  and some have long term goals like education planning of child, child marriage, retirement planning. Your investment should be goal based and specific, you should earmark funds for every goal.

Goal based Investment means saving for specific goals. Following are the steps to be followed :

· Think of major events in your life which would have a significant financial implication, and for which you would like to save.

· Find out the cost of achieving these goals today.

· Determine how far away these goals are from today (in years).

· Determine the cost of achieving these goals at the target time using as approximate but conservative rate of inflation.

· Determine the after tax rate of return you can achieve when you invest today.

· Arrive at the per-year and per month investment necessary for each goal , if needed.

· Start investing today, specifically for these goals.

Download Excel Sheet to know what  amount you required to achieve the specific financial goal and benefits of investing early.