Achieve More with Purpose: Linking Investments to Life Goals

As it is rightly said that those who set goals & follow a structured plan tend to achieve them 50% faster than those who set it without a plan; But what is missed between the fine lines is that those who set goals & link it to their structured plan, not just achieve their goals faster but also track, quantify & set up additional life goals & reach there without any additional effort.

Whenever I was called upon to discuss personal finance, one question that always popped in people’s mind that how can we achieve our financial goals; What do we need to do to make sure that goals are achieved?

Every time I heard someone ask me this, I explained the concept of 3 P’s

Precaution, Patience & Perseverance

Once we set goals with specific time period & quantify it with an amount, we get a clear view of the road ahead. All we need to do is walk the path without changing the course.

A common man may not be aware of their financial goals or how to set them & that is where professional assistance is required. By taking Precautions in setting right & SMART targets, keeping Patience to let it work & Perseverance towards it will make you accomplish the goals effortlessly.

Let’s demystify this concept.

1. Set SMART Goals: Before you set goals, believe in it, draw a picture of it in your mind, visualize it & just when you can feel it, write it down. SMART goals stand for

a. Specific

b. Measurable

c. Achievable

d. Relevant

e. Time-Bound

This Strategy will clear your mind of the clutter & focus your thoughts on setting the right targets.

2. Select the right Path: Once you are clear about your goals & the timelines, choose the right investment tool. This tool should align with your expectation from your investments i.e choosing a safer tool will compromise on the returns while choosing an aggressive tool to get more juice out of it will surpass your risk-tolerance. So, it becomes extremely important to have a balanced approach to Risk & Return to stay on the same scale.

3. Get your concept straight: There has been a thumb rule of investing & growing your wealth. Any ideal investment you do should accolade you with a bare minimum of 5% excess of post tax & post inflation. Any investment giving you a return less than this is bound to back-fire & leave you stranded from achieving your target.

For eg: If current inflation is 6% & tax is 1.8% (assuming 30% tax bracket) then your investment should yield you at least 12.8% on CAGR basis for it to be effective tool in achieving your goals. Anything less than this will take you backwards from your goal.

(Disclaimer: The inflation & returns are assumed for illustration purpose only)

4. Put your money where your mouth is: Once you have the concept figured, allocate funds to those goal post & invest it with that specific time line that you have set for it. Now you can either allocate a chunk of money or start a systematic investment plan (SIP). Only once you set a specific amount to your goals, it starts moving towards you.

5. Periodical Review: Once you have set your goals, allocated an amount for it, set-up a plan & the right tool to achieve it, you got to review it periodically. The review frequency can vary based on the investment tool. Ideally it is recommended to review it annually to make sure you are not deviating from your goals, or have fallen short of it. Quantifying the factors like time-duration-amount-risk-returns; becomes extremely crucial while reviewing your goals & Investments.

All said & done, But how do we know which Investment product is best suitable for me?

The ideal tool to achieve all your financial goals that has a combination of Flexible investment option, balanced approach, multiple strategies to choose & proven track record to create weslth is MUTUAL FUND.

I have been a Mutual fund Investor & a Personal finance Professional for almost a decade now & I can confidently say that Mutual funds helped me achieve my goals faster, smoother & made me financially free.

To know more about how you can afford anything you desire, write to me. I will assist in setting your goals.