Why Practising Goal-Based Investment is a Must?
As a thinking, breathing, fully-functioning individual, if you haven’t yet considered investing, you’re not realizing your pecuniary advantages.
It is not merely an undertaking reserved for those who are financially inclined. Every household in the country should partake in it to propagate regular financial management.
To stretch this thought a bit further, contemplate a specific methodology of investing – goal-based investment. It is an easier concept for non-investors to swallow as it denotes exactly what it says. Invest in a goal. Not because you have to or need to.
Practicing this, you will suddenly find yourself thinking about your ambitions and what you want to achieve in say, the next 10 years. Then the haze will clear, and you will be able to start channeling funds into avenues, wherefrom the returns will help realize your goals efficiently.
Goal-Based Investment: What this Means for You?
Goal-based investment means that you pick out specific goals—short term goals, mid-term goals, or long-term goals—and start investing to achieve the desired objective.
How do you measure the success of this approach?
If you are able to fulfill your life goal, then the whole rigmarole is a winner. The entire investment mantra follows a goal-based approach. The main focus here is the goal, not the investment portfolio per se.
Why Should You opt for Goal-Based Investment?
There are several solid reasons to go in for goal-based investment. Firstly, the purpose of your financial odyssey will become apparent to you, and you will find that your targets have become achievable. The whole plan of objective fulfillment will also become more tangible and concrete, laying a robust foundation you can then build on.
If your financial goal setting is carried out coherently, the whole investment procedure can begin smoothly.
5 Goal-Based Investment Targets You Can Set
Whether it is short-term goals or long-term ones, you can find on our list something that will resonate with you—something worth investing in.
- For emergencies
You’ll be surprised to know that there is very little that we humans can predict.
We can’t so much as predict the election outcomes accurately, why would you think we can predict the next mishap that can befall us? You need to account for the unforeseen. When creating a financial plan for your life, factor in emergencies with a capital E—like an unexpected hospital stay, a sudden loss of a job, or an unforeseen set of expenditures.
- For a retirement
You will need to start planning early if you want to spend your golden years in the best possible way.
Once you turn sixty, the steady flow of cash from your job will be stoppered, and you will have to depend on your wits to get by unless you have contingency plans in place. Ideally, it would be best if you started preparing for retirement the day you begin to earn.
Expenses will only skyrocket, and to maintain the quality of your life, you need the steady cash only a sound investment portfolio can provide.
- Children’s education
Higher education is expensive. Enrolling in premier colleges/universities, even more so.
These institutions provide your child with the rudiments that will ultimately guide him/her to becoming a fully-functioning adult. ‘An investment in knowledge pays the best interest,’ so said Benjamin Franklin, and you should secure the future of your child by granting him/her the highest quality education.
Both schools and colleges will only get pricey as time goes by, so prepare ahead wisely with goal-based planning.
- Buying a home and vehicle
The treasured hope of many couples and singletons is having a space of their own. And owning a vehicle is only the cherry on the cake. But while owning a home and cars have become affordable in the recent past with interest rates slashed, it isn’t all that easy. You need to pay off the loan and if you are looking to avail of one in the near future, make sure you are financially stable to pay it off.
- Hobbies, holidays, and holistic development
One of the most outstanding short-term goals to have is investing in your hobby or a holiday. Your hobby could be traveling or mountain climbing, or something as exorbitant as wine tasting. No matter the interests you have picked up throughout your life, finance these pleasures with appropriate goal-based investment planning.
Adequate funds can improve the quality of your life.
Achieve your short-term goals and long-term ones with the simple philosophy of investing. Cut the objective chunk into bite-sized pieces and slowly tick them off your list with goal-based investment planning.
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