Everyone has a desire to achieve something big in life. These desires can vary, such as going on a trip, buying a car, purchasing a house, or covering children’s education expenses. Some people also plan for their retirement. However, you can’t achieve all of this by just dreaming. It’s essential to plan carefully and save regularly. Moreover, investing in the right places is crucial. In all these cases, your ‘target-based saving’ can help. Through this article, we will share all the details regarding goal-based investing.

Keep Inflation and Time in Mind

Your investment can be in property, mutual funds, gold, etc. While withdrawing money, always consider inflation and the time needed to reach your goal. These two factors will determine how much you need to save. After setting your goal, the next step is to calculate how much money you will require. To do this, you must understand inflation and the time needed to achieve each goal.

Focus on Goal-Based Investment

Vivek Jain, Policybazaar’s investment head, says that whether you want to buy your dream house, save for your child’s education, or plan for retirement, you should focus on goal-based investment. For example, if you start retirement planning at 35 and save ₹20,000 every month for 25 years, you can accumulate up to ₹3.8 crore at an average return of 12% from market-linked products.

Identify and Prioritize Your Goals

First, list all your financial goals. Then, arrange them by priority based on their importance and urgency. This will help you decide where to invest your money first.

Calculate the Required Amount

Next, determine how much money you need for each goal. Consider two key factors: inflation and the time required to achieve your target.

Choose the Right Investment Based on Your Goal

Invest based on the time frame and risk level of your goal. For short-term goals, low-risk investments are better. For long-term goals, you can take slightly higher risks.

Select the Best Investment Method

Different goals require different investment approaches. Short-term goals are better suited for low-risk investments like fixed deposits, short-term bonds, or liquid funds. Long-term goals can include higher-risk investments like stocks, mutual funds, or ETFs.

Review and Adjust Regularly

Monitor your investments periodically and rebalance them as needed. This will help keep your money aligned with your changing goals and risk tolerance.

Automate Your Investments

Set up an automatic transfer from your salary to your investment account. This ensures consistent savings and reduces the effort of manual deposits.

Stay Disciplined in Investing

Always invest a portion of your income first before spending. Market fluctuations are common, so avoid making emotional decisions that could harm your long-term financial goals.

Track Your Investments

Regularly check the performance of your investments. If necessary, adjust your savings amount or strategy to stay on track with your financial goals.

Seek Expert Advice If Needed

If you are unsure about where to invest, consider consulting a financial advisor. They can help you create a personalized investment plan based on your goals and risk tolerance.