Realise Your Life Goals with a Proper Goal-Based Investment Plan

Financial goals vary for each one of us. While some of you might have short-term goals such as investing to have sufficient funds to complete your higher education, others might have long-term goals such as the wedding of their children, retirement plans, etc.

In this regard, a goal based investment plan is imperative. Having a set financial objective in mind helps you decide where and in which class of assets to invest your money in so that you are able to save enough to realise your goal.

While planning for the same, you might also take into consideration other factors such as your risk appetite and the duration involved in the investment.

These days, two financial instruments, ULIP as well as mutual funds are gaining momentum in the market since they offer a diverse range of investment opportunities varying in risk, returns, duration, etc.

In this article, not only do we tell how to go about making a goal-based investment plan but also let you know the benefits of investing in ULIPs and mutual funds.

How to Make a Goal Based Investment Plan?

Here are a few factors that you should keep in mind while making a goal based investment plan.

Plan in Advance

Planning hastily can lead to bad decisions. Most of us start planning only when it is the end of the financial year which makes the investment too late by then. Chalk out your potential investment avenues right at the beginning of the year so that you are able to save taxes throughout the financial term and so that your goals are achieved in a time bound manner.

Become a Disciplined Investor

It is only a systematic approach that can help you do big in life, financially. Being disciplined with respect to your investment is quintessential to grow your money. If you are a beginner or are still young, start by saving a small portion of your income and invest it into useful financial avenues such as ULIP or mutual funds. As your income grows, increase your savings gradually and increase the corpus of your return.

Review Your Investments

Reviewing your investments from time to time is another great way to ensure that you are in sync with your financial goals. Sometimes, it may so happen that you might want to change your investment from, say, debt to equity or from safer investments to options that involve a little risk in order to increase your returns. This may involve carefully analysing and reviewing your current portfolio to know the investment avenue from which can you easily transfer funds to such lucrative financial instruments.

ULIP and Mutual Funds

Let us now talk about the two most lucrative modes of investment that can help you fructify your journey towards your financial goals.

ULIPs and mutual funds are a sound way of investing in a regular and timely manner to receive the benefits at the end.

Both these modes have their own merits and demerits and it is recommended that you take your call after carefully considering which one out of the two suits you best depending on your risk appetite and budget.

Investment in ULIP

Before we tell you about investing in ULIP, let us understand what ULIP actually means.

What is ULIP?

ULIP actually stands for Unit Linked Insurance Plan. It is a combination of life insurance and investment wherein a part of your premium paid towards insurance is invested in money markets such as stocks.

ULIPs promise great returns in the long run by multiplying the principal amount thus ensuring financial security at the end of the insurance period.

Benefits of ULIP

Check out some great benefits of ULIP.

Tax Benefits

ULIPs are covered under tax benefits as provided under Section 80C of the Income Tax Act, 1961. It is one of the most lucrative ways to avoid tax and invest your money in profitable avenues.

Long-term Investment

For those of you who prefer investing in the long run, ULIPs are quite helpful in the sense that your money grows faster over a longer period than any short-term financial instrument. Additionally, it is far better to invest in ULIPs than fixed deposits since the returns here are quite higher.

Flexibility

Ulip offer flexibility in terms of duration depending upon your financial goals. Right from a life insurance of say, 10 years to as much as 20 years, ULIPs differ with respect to duration to suit the needs of investors. They also offer flexibility with respect to the risk appetite of the customer by offering a range of insurance covers depending on the risk involved in each of them.

Investing in Mutual Funds

Mutual funds are one of the most sought-after financial instruments for the inherent benefits they offer.

What are Mutual Funds?

Mutual funds are financial instruments in which the money invested by you is further invested by the company in various avenues such as stocks, bonds, etc. in order to multiply your return over a period of time.

Benefits of Mutual Funds

Check out the various benefits of investing in mutual funds:

Diversification

Mutual funds are analogous to diversified investments since your money is invested in a bunch of assets by professionally managed portfolio companies. As such, you stand a lesser chance of incurring losses by avoiding putting all your eggs in one basket.

Risk Appetite

You can decide your choice of mutual funds depending on your risk appetite. While the ones that involve high risk offer lucrative returns, in the long run, the one with low risk is comparatively safer, however, it offers only moderate profits.

Monthly Payments

Another great way to invest your money in mutual funds is Systematic Investment Plans (SIPs) in which a small monthly payment is paid by you towards investment in your fund which has a lock-in period of say, 2-3 years. SIPs allow you to invest a nominal amount in regular intervals thereby encouraging you to save money.

Convenient Mode of Investment

Investing in mutual funds is quite convenient as compared to stocks or other complex financial instruments. You can easily put your money in the right mutual funds if you exactly know your financial requirements and the risk you are willing to undertake.

Conclusion

Goal based financial planning is imperative when it comes to investment. It helps you invest sagaciously so you can reap the fruit of your hard earned savings in the best manner possible.

Hi this is Somesh from Mumbai. I am working with the one of the leading online insurance broking firm as a customer relationship manager. I like to discuss with customer to solve their problem and queries. More Peoples still unaware about insurance