Financial Goal based investments planned according to certain factors

Financial Goal based investments are a kind of investments that focus on only some specific and private goals of an individual before investing. It is different from other investments in terms that it does not measure the performance of an investment with other variables. Goal-Based Investments are planned according to certain factors which include an age of an individual, his/her financial situation etc.

Financial Goal based investments

Following are some steps which will help you reach your goals with Financial Goal Based Investments:-

1. Identify your goals:- This is the most important step in this whole planning as this step ties your investments with your specific goals and gives full priority to your goals rather than comparing the investments with other variables. This step also helps in calculating the amount of money which will be needed to fulfill these specific goals with Financial Goal Based Investments.

Financial Goal based investments

2. Categorize division of goals:- In this step, an individual’s specific goals are divided into following three categories:-

Short term goals:- These goals have a duration from few months to 2 years at max. Example of such goals is buying a car or planning a vacation.

Medium term goals:- These goals can range from 3 years and up to 8 years for eg purchasing a house or opening a new business.

Long-term goals:- It has a time period of 8 or more years. For eg retirement planning or child’s marriage.

3. Picking investments:-Choosing or picking a right investment for yourself is quite confusing so let mutual funds do it for you as mutual funds are the smartest way of investing in various classes of assets in the market and in the industry as well. Being a goal-based investment this step will help you find out which investment is best with which category of a goal.

Financial Goal based investments

Long-term goals:- According to a recent news for long-term goals “one must invest in Invest in equity-oriented funds via SIPs and transfer funds through STP to liquid funds when the date of expenditure nears”

Medium term goals:- In medium-term goals, one must invest in equity and fixed income securities.

Short term goals:- In this case, one should start investing with equity mutual funds and then can shift to debt funds.

4. Review your goals and investments:- This is one of the main steps in Financial Goal Based Investments as certain investments which we are relying on may not be of that much use for us.

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