Module 9: Financial Goals
Topic: Creating Financial Goals
All of us will have certain aspirations in our life/career. To fulfill those aspirations we would need a certain amount of money/corpus which is why we earn, save and invest. Hence, the goal of investing in mutual funds or any instrument is to achieve an objective or financial goal.
Every financial goal will have three different parts to it:
a) The amount of corpus required
b) The time over which the corpus has to be accumulated
c) Your current age profile
If you have a long-term horizon for your financial goal - say for example, retirement at the age of 50 and your current age is 30 then you have a significant amount of time to stay invested. In that case, you may consider having a higher equity allocation compared to debt. This is because investment in equities may have a higher return potential over the long term but you need to be comfortable with a very high degree of risk as well. An example of a financial goal for a 25 year old can be → “As a young professional who is 25 years of age, I want to retire by the age of 40 with a corpus of 2 Cr INR.”
Please bear in mind to consider inflation as well when you are deciding the final corpus required to achieve your financial goals.
Task:
As an investor, it is important to understand that the objective of investing/building a portfolio is to achieve a certain financial goal. Write down your financial goals by thinking deeply about what you want to achieve and also discuss with your family to understand their aspirations.
Key Takeaway:
Wealth creation does not happen overnight. It takes time, patience and consistency. Hence, it is important to set realistic timelines when writing your financial goals.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
An Investor education and awareness initiative by Zerodha Mutual Fund.
