Goal-Based Financial Planning
Goal-based investing aligns your investments with specific life goals. Each goal has a timeline and target amount, helping you choose appropriate investments.
Common Financial Goals
| Goal | Timeline | Recommended Investment |
|---|---|---|
| Emergency Fund | 1-2 years | Liquid/Savings |
| Vacation | 1-3 years | Debt Funds |
| Car Purchase | 2-5 years | Hybrid Funds |
| Home Down Payment | 5-7 years | Balanced/Equity |
| Child's Education | 10-18 years | Equity Funds |
| Retirement | 20-30 years | Diversified Equity |
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Pro Tip
Separate your goals and investments. Don't mix short-term goals with long-term ones. Use different funds/accounts for different goals.
Steps to Achieve Your Goals
- Define: List all your goals with target amounts
- Prioritize: Rank goals by importance
- Inflate: Account for inflation in target amounts
- Invest: Choose right instruments for each timeline
- Monitor: Review and rebalance annually