9. Assign every Investment with a Life Goal

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Goal setting is a powerful process for thinking about ideal future.

The process of setting goals which helps us to find  What we want ?where we are going? What we enjoy?

Once our goals are defined and preset, now is the time to link the investments to our life goals.

When we link our assets to a goal, it will be a great sense of responsibility towards our financial well being & will resist the temptation to liquidate the funds which are earmarked to a financial goal.

For e.g. we have been consistently investing a certain amount per month through SIP.

Some years down the line, if we’ve consciously tagged this investment to our child’s education goal, we’ll feel less inclined to withdraw it for buying a sedan or going on a vacation or lending that money to relatives & friends when they knock the door.

While doing this, we should check on the expected maturity of the investment to find the best match between due year of the goal vis a vis maturity year of the asset that is linked to the goal.

Below specification can broadly lay down the right way to link the financial goals to the assets:

·      Short Term Goals (Less than 2 years) - Fixed Deposit, Liquid fund, Cash & Bank Balances

·      Medium term goals (2 to 5 Years) - FD/ RD, Debt & MIP Mutual funds

·      Long term goals (5 Years +) - Direct Equity, Equity Mutual funds, PPF, EPF, Insurance cum Investment Plans, NPS