We all know life will be smooth and comfortable when we properly plan ahead of it. Many of us have plans for our lives but when it comes to finances mostly we don’t plan ahead or we do not have long term plans with our earnings. And this is why everyone needs to have a proper goal based financial planning. Have you ever wondered why am I earning or what is my wealth for? If you could come up with answers to these questions, then you will have a clear mind on what really matters for you in your life.
Nowadays the problem with many of the people is that they do not know what their goals are. They may not have written them down. They may not have prioritized them. They may not have even really thought about them. On the other hand, financial literacy is an important tool everyone should master in order to achieve their financial goals and stay out of debt traps.
Managing finances is not just saving or investing the money you earn. Proper management of finances is the key to achieving goals in your life or in other words making your dreams come true. After all, who wants to die as the world’s richest man with bags full of money unspent and without achieving a single goal of your life?
Goal based financial planning is a whole new concept that focuses on investing with a goal of achieving certain life objectives. Many traditional financial plans are targeted to generate the highest return, interest or profit on the wealth you invested in. Goal based financial planning involves a wealth manager or investment firm’s clients measuring their progress towards specific life goals.
Before entering into any sort of investment plans it is important to have some financial objectives in your mind. Most common financial objectives include children’s education or higher education, retirement, buying a property or even purchasing a vehicle. By choosing a goal-based financial plan you will be able to meet all of your investment goals at different phases of your life without any delays. It is one of the latest ways in wealth management that focus on investing to achieve specified financial objectives.
Before jumping into a financial plan it is important to set a goal. These goals may differ person to person based on their individual concerns. But in general most of our goals are based on factors such as family, home, career, retirement, business or health. By setting up financial goals will help you with figuring out
- How much do you need to achieve this goal at present?
- How much more will the goal cost in future?
- How much time is left to save and invest for this goal?
- How much do you need to invest (regularly or one time) to achieve the goal?
There is no one-time solution or a special formula you can apply to all individual goals. Each and every goal should be addressed in a different way and this is why financial advice is important. Personal financial advice from an expert who understands your objectives and knows your goals will help you to balance and manage risk of your finances.
Not only that, the advisor will help you to focus on the bigger picture of the financial moves you are planning ahead, give a clear idea about what is achievable and divert you to the right path. A financial analyst can draft a plan for your future achievements. The proper plan will go ahead no matter how many barriers it comes across. A well balanced plan will help you overcome different scenarios specially by saving you from sudden or unexpected financial downturns.
It is easy to have an open conversation with a financial advisor explaining the goals you have in mind. It is important to mention the stakeholders such as children, wife, parents or business partners whom you would like to include in your financial plan.
Goal based financial planning is not just another smart strategy to invest your money. It will let you attain your goals fast during your life journey. End of the day providing a stress free future.
Goal based Planning Simplifies Investments
Sometimes when you have some extra money in hand you may wonder what best investment I could do with it, how much should I allocate for an investment and how long should I invest it. With goal based financial planning you can easily find answers to all these questions. Also financial planning is not just about investing money but it involves tax savings too. By investing in certain products will give a deduction in taxes.
Diversification makes more Profits
Financial planning gives you an opportunity to use a variety of financial products to achieve goals. On the other hand, it will maximize your returns or in other words make more profits. Diversifying your investments lower the risk and create opportunities for long term wealth building.
A Correct Move is all you need
By identifying the priorities in life and figuring out what investment best suits your needs will let you know how much money you should invest on each goal and on where you should invest. This way you do not have to follow the trend or the flow and go invest in a wrong product that ultimately prevents you from achieving the goals.
Either you hire an expert for planning finances or you decide to do it by yourself. Initial assessment of your current financial situation is important. Then prioritize each life goal of your life. After listing the life goals, it is good to categorize them into short term and long term goals. Later you can come up with suitable investment plans for each goal you set within the time set up by you to achieve it.
It is vital to calculate the amount you require to achieve each goal, the amount you invest for each goal at once or by instalments and how much risk you can handle with your investments.
Achieve our goals or to live our life comfortably money plays the key role. This is why it is important to save money and spend cautiously. Each person’s life is different and can be full of adventures as time passes. No one knows what we can expect at the next moment in our life. Unexpected things can happen any moment and we should be physically, mentally and financially strong enough to accept these changes. Planning always helps us live a comfortable life with minimum worries.
By setting up life goals and taking logical steps to achieve them, you can eliminate much of the uncertainty that is common among those who don’t plan. It can do wonders to your wealth and help you achieve all your financial goals. Financial planning is a constant interactive process that runs along with your life.
It needs certain amendments at certain points in order to adjust the situations in your life. Once a qualitative and a value based financial plan is prepared with the help of an expert or by yourself it will bring you a sense of relief and peace for your mind knowing that your future finances are secured. Minor adjustments to this plan annually will add a significant impact as life keeps changing constantly.
Hope the blog gave you a clear idea on what is goal based financial planning and what are the best ways to save and invest your money. For more info on our services visit our other website Teeparam. Thanks for reading our blog.