The first step in doing anything of importance is to assess where you stand today and where want to reach after a specific time period. To do this, you need to first measure your financial health by evaluating your current financial portfolio.#ppsShowPopUp_103

First, you need to set a target of where you want to reach in life – list out the things you want to achieve. You need to determine your financial goals.

Common financial goals may include:

  • Purchase of home
  • Purchase of Car
  • Child’s Education
  • Supporting your parents
  • Child’s Marriage
  • Retirement
  • Vacation
  • Buying Holiday Home
  • Wealth Accumulation
  • Creating Trusts
  • Charity / philanthropy
  • Short term (less than 3 years)
  • Medium term (3 to 5 years)
  • Long term (more than 5 years )

This will help you to know what goals are to be met first and therefore channelize your investments accordingly, based on the time to the goal and your risk profile.

We never know what the future holds for us, so it’s always best to be prepared. Having an emergency fund is extremely important so you’re always prepared to deal with what life brings —good or bad.

It’s a good idea to make an emergency fund one of your highest savings priorities. An emergency fund should cover three to six months’ worth of realistic living expenses. If you feel your income is stable then you may be able to plan for the lower figure. An emergency fund can also shield you from the high cost of borrowing.

If a goal is not quantified, it becomes very difficult to select a path to achieve it. for example you may have a goal of funding your child’s higher education and you need 25 lacs as of today.

Do consider the impact of inflation on it and plan for the future value of money.

Example : Mr. Sharma has a 6 year old daughter named Diya. He plans to send his Diya to college for graduation at age 18 and post graduation at age 21, for which today’s fees are Rs. 10 lakhs and Rs. 25 lakhs respectively.

What corpus does Mr. Sharma need to accumulate for Diya’s education goals?

Assuming that inflation in college fees is approximately 7% p.a:

Diya will go to college at age 18 i.e. in 12 years, college fees at that time will be approximately Rs. 22.52 Lacs. This is the amount Mr. Sharma has to accumulate in 12 years to send Diya for the same standard of college education available today at Rs. 10 lakhs.

Similarly, for Diya’s post graduation, in 15 years Mr. Sharma needs to accumulate

Approximately Rs. 68.97 Lacs to give the same level of post graduate education available for Rs. 25 lakhs today.

This is the effect inflation has had on college education fees.

Once your goals are quantified i.e. you have a tenure, an amount and a clear idea of your goals of retirement, child’s education and marriage, asset purchase and others, it is time to actually plan for these goals.


Education  Planning Ms. Diya Sharma
Child’s Name Ms. Diya Sharma
Child’s Age 6
Inflation (Education) 7.00%
Goal Diya’s Age College Fees (Present ) College Fees (Future) Years to go Monthly Investment needed
Graduation 18 1,000,000 2,252,192 12 7,379
Post Graduation 21 2,500,000 6,897,579 15 14,630
3,500,000 9,149,770   22,010
Expected Rate of Return on Investments considered is 12%
Mr. Sharma should start Investing Rs. 22,010/-  per month to plan for Diya’s Educational Goals


Remember, your goals should be Specific, Measurable, Achievable, Realistic, Time-Bound

The most convenient and one of the easiest ways to accumulate wealth are by investing regularly and in a disciplined manner.

investors seek the perfect entry and exit point of the market, However, it is impossible to regularly be correct in predicting market fluctuations, and thus know exactly when to enter and to exit.

the SIP route will help you answer the question of ‘when to invest’ in the

markets. You only need to be very regular with your investments and remember that market lows will help you buy more units. This is when your SIP will give you the maximum benefit.

Means allocating your investments across various investment avenues or assets so that the poor performance of any one asset does not affect the overall performance of the entire portfolio. Different asset classes are differently correlated with one another. For example, when equity does well, debt or gold may not do well, and vice versa. It is this different correlation that makes asset allocation such a critical component of financial planning.

But remember, asset allocation is not a one-time process. It is not static but dynamic. As your goal draws nearer, it is important to re-assess your asset allocation and withdraw from risky investments – to de-risk your goal’s portfolio.

Setting your Goals is typically not an on-going process. You can set your goals and begin working towards them. Review of progress towards your goals can happen typically once a year.

Looking to multiply your investments in a systematic manner?

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