Imagine driving without even knowing the targeted destination. Sounds weird, right? The same is the case when you are investing without keeping a particular financial goal in mind. In the cases where everything seems bleak, Goal based investing in India can guide you to invest better and reach better results.
“Rome wasn’t built in a day,” and this is true if you are planning to achieve something in the longer run.
It is out of no one’s notice that having a goal in mind can help you move forward with measured steps and reach the investment objective on time. Goal based investing is all about planning and then executing it properly.
Every individual has a different goal and different time frames in which they want to fulfil them. Some might be planning for their child’s education while some must be thinking about buying a new house. Some might even be thinking that can I invest 100 Rs in Share market.
The planning to achieve all this begins early.
Goal based investing in India revolves around the concept of investing regularly to meet the desired financial goals in the future.
With the proper assistance and the right use of this strategy, an investor can achieve all the financial targets in the expected time frame.
Let us understand this with the help of an example. Imagine that an individual wants to buy a house worth Rs. 30 lakhs (current price) in the next 10 years. If the inflation rate is 6%, then the price will surge upto Rs. 53.72 lakhs approximately.
If you don’t have that amount of money, then it is sure that you will start saving it accordingly either in your bank account or invest in something that has high returns.
Wondering how to get started? Well, you can now plan your goal based investing in India easily by following the right strategy and plan.
How to do Goal Based Investing in India?
As we discussed earlier that every individual has different goals and different time frames in which they plan to accomplish them.
When we talk about goal based investing in India, the significant areas of investor’s interest are marriage, education, buying a house or a car, and some other aspirations.
It is evident that to fulfil the goals, an investor needs to have an adequate amount of capital. But what if it is not available at the time when you need it?
For these situations, you either save your money in your bank account or invest in some stocks with great returns. But the most popular and profitable option is planning your investment in the stock market.
This includes investing in equity shares, hybrid funds, and mutual funds. It is the most convenient and high-return option for goal-based investing.
Usually, goal-based investing in India is used for long-term goals, but you can also consider it for different aspirations.
There is a step-by-step process to fulfil your financial goals in the desired time frame. Let us have a look as to how to do goal-based investing in India?
Set Your Financial Goals
Before planning anything, it is very important that you should have a clear financial goal. You can make a priority list of the goals that you want to achieve, how much time you want to achieve, and how much money you need for it.
Once you have prioritized your goals (long-term, short-term, mid-term), it becomes convenient to plan the goal accordingly.
It is evident that the figures and assumptions will not be accurate, but they can be comparable.
Categorize your Goals
After you have identified your goals, it is essential to categorize them and put them in buckets (long-term, mid-term, and short-term).
The various categories in which you can categorize your goals are as follows:
⭐ Long-term goal- Goals that have a time frame of 7-10 years or more. This might include retirement plans.
⭐ Mid-term goal-Goals that have a time horizon of 3-7 years. For example– buying a house.
⭐ Short-term goal-These goals have a time horizon of 1-3 years. For example– marriage plans, education plans, etc.
Assess Risk Appetite
Ṭhe more diverse the portfolio is, the more profits it will generate. You also need to analyze your risk appetite. One of the most important steps in making profits is to keep an eye on the risk appetite as well.
If you are someone who is willing to take a lot of risks, then you should also keep in mind that there is a more significant possibility of losing money in the future.
Similarly, even keeping the appetite for risk low can result in lower profits.
It is therefore important that you always analyze your risk appetite before investing your hard-earned money.
For this, it is good to check the fundamentals of the company and the future objectives to make a smarter decision.
After you have done the analysis of your risk appetite, it is time to allocate the assets. Risks and returns- both the terms are interrelated. This means that the higher risks that you will take, the more returns you will get.
There is a need to choose the right instrument.
You can choose from the below-listed investment instruments:
▶️ Debt Funds:If you are going in for short-term or mid-term goals, then investing in debt funds is the right investment plan for you.
▶️ Equity Funds-For a time frame of either 5 years or more, equity is the most suitable option.
▶️ Hybrid Funds-After the analysis of your risk appetite, if you find it out to be moderate, then you can invest in the hybrid funds. These are most suited for the long-term goals.
▶️ ELSS Funds-These are the most suited when you want to achieve your tax filing and planning goals.
Preparation of Investment Plan
Now that you have calculated and analyzed everything necessary regarding your goal-based investing in India, now you can get to the actual part.
You can now prepare an investment plan based on your financial goals, risk appetite, the amount of money you have, and the one needed to fulfill your financial goals.
This is the step where your planning will become a reality. Build your portfolio, get an investment plan, and get ready to achieve your financial goals.
Benefits of Goal Based Investing in India
Apart from the long-term benefits that goal-based investing India reaps, there are other benefits of goal based investing in India.
🎇 Save more, invest more-When you have a plan and proper strategy in your mind, it becomes easier to reach your goals. With an appropriate layout of your finances and the places you want to invest them in, you will get better returns. You will, for sure, save more, and thus, support more.
🎇 Discipline-When everything is so perfectly planned out, you get very disciplined in your investing process.
🎇 Less or no debt-Debts can cause an excellent cut on your saving amount. When you invest your money correctly, you can fulfill a lot of aspirations without being dependent on any kind of debt.
🎇 No loan-When you are saving with a set plan and preparing for your financial goals in advance, it will save you from taking unnecessary loans.
With the above-listed benefits, it is clear that it is definitely a sweet deal.
How to do Goal-Based Investing with Glide Invest?
If you are planning to start goal-based investing in India, then Glide Invest is the perfect solution for you. It is a great online investing platform for Indian investors who are willing to invest in mutual funds directly to fulfil their financial goals.
In short, the app is specifically designed to help potential investors like you to help you through the financial stages of life.
The app offers you the personalized risk assessing platforms and the appropriate knowledge that gives you a completely different experience of creating a robust portfolio of all your financial goals.
The app also provides an asset allocation mix, personalized and curated carefully for each individual according to their financial goals. The app leaves no stone unturned in making the life of investors stress-free and convenient.
To get started with the goal-based investment journey with Glide Invest download the app from App Store and Google Play Store.
A single step every day makes a journey for a million miles. Similarly, planning your financial goals and strategically moving towards them can clearly make a huge impact.
Everyone has different financial goals and different time frames to fulfill them. Once you have figured out your goals, built a portfolio, picked an investment instrument, and prepared a plan, you are all set to achieve your aspiration.
Willing to open a Demat Account? We will help you to start your investment journey.