Achieve Your Life Goals with a Strategic Goal-Based Investment Plan

Goal-Based Investment Planning: What Is It

Unlike traditional investment planning, which typically calls for investing in popular assets, goal-based investment planning calls for a more personalised approach. This type of investment planning is more focused on what your needs and preferences are. This tailor-made strategy ensures that you can meet your personal life goals through your investments, rather than the performance of different types of assets in the market.

Thinking ahead, as he also wants to secure his wife and children’s future, he opts for ULIPs (Unit Linked Insurance Plans. This can become a smart choice as in addition to providing life cover, also also offers the potential for market-linked returns. Since Rahul had a clear picture of his life goals, he chose investments based on these goals. That’s the essence of goal-based investing: choosing financial products based on specific milestones in life.

Mastering Goal-Based Investment to Achieve Life Goals

Your personal life goals, whether it is buying a car, going on a dream vacation or creating a peaceful retirement life, require efficient financial planning. Here’s a little guide that can help you master goal-based investing to achieve life goals:

1. Get A Clear Picture of Your Life Goals
   You need to have a clear picture of your life goals. This can be any goal, whether it is short-term or long-term. Additionally, you can also have a clear road map for each of these goals, like setting a target amount, creating a deadline and a plan to achieve all this. Factor in your financial responsibilities, your wedding, children, retirement, etc. and keeping in mind the unpredictable nature of life, do not forget adding the blanket of insurance.
   
   Pro Tip: There are several online tools and calculators that can come in very handy when you sit down to make a financial road map.
2. A Smart Asset Allocation
   Now that you have a clear picture of your life goals, what you need to do is plan an efficient asset allocation depending on your income source. Typically, your goals require different goal-based investment strategies, and choosing the right asset, be it stocks, bonds, MF, gold, etc, is essential. Rather than choosing the so-called best investment plans and putting all your eggs in one basket, try distributing or diversifying your investments across different asset classes.
3. Set a Time Frame – Short-term, medium-term, or long-term?
   You may need to set a time frame in order to match your investments to timelines.
   - Short-term goals that usually have a timeframe of 1 to 3 years require you to invest in low-risk assets like debt funds or fixed deposits.
   
   - For your medium goals that usually have a timeframe of 3 to 7 years, you can choose investments with moderate risk, like hybrid funds.
   
   - For your long-term goals, you can put your money in investments like equity mutual funds or stocks that are typically known for riding out market fluctuations in the long run.
4. Create a Disciplined Investment Plan
   When it comes to goal based investment strategy, it is important to stay away from making emotional decisions based on market volatility. Remember not to lose track of your initial investment strategy due to moderate market fluctuations or volatility. Simply put, stick to your plan even when markets fluctuate.
   
   Pro Tip: If you are a novice investor, you can start a Systematic Investment Plan (SIP) that automatically deducts a fixed amount at regular intervals from your account and invests in a choice of your fund.
5. Aligning Goals with Risk Appetite
   While choosing an investment plan that aligns with your personal goals, it is important that you are mindful of your risk appetite. If your goals are unique, remember that your risk appetite will also require careful analysis. Make sure to get an understanding of your risk tolerance before making an investment decision.
   
   Pro Tip: If your risk tolerance is low, you might want to invest in more secure options like Public Provident Fund, fixed deposits, debt mutual funds, etc, as they are typically known for low risks.
6. Regular Reviewing and Altering Your Portfolio
   Your life goals when you are in your 20s can be different from what your life goals would be when you are in your late 30s. This is why reviewing and altering your investment is important. This can include investing in a new plan, continuing an existing plan or withdrawing from an investment scheme.
   
   Pro Tip: Since inflation is a major concern in today’s time and is only set to increase in future, you can look for inflation-protected investment plans like inflation-indexed bonds, equity mutual funds etc.

To Sum Up

Creating a goal-based investment portfolio is like putting your money on autopilot, which is designed to fly straight towards your life goals. Instead of mindlessly putting your money on investments that your friends, family, or colleagues are making, you can take a more personalised approach by choosing an investment that best aligns with your personal goals.

Instead of investing aimlessly, you can explore different types of investment plans at Jio Insurance Broking to compare the benefits, tax deduction, interest rates, etc and make an informed decision that helps you achieve your life goals