Financial Goal Setting

We all have dreams, but most of us continue dreaming, whereas some of us convert their dreams into reality. Why is it that some of us manage to make our dreams a reality and others find it difficult? Simple. We try to find reasons or excuses why our dreams are difficult to be met. This is where we kill our dream. Then when we ask how was another person able to achieve his dream and we find reasons for his / her success. What if I tell you we all can meet our dreams and achieve it, if we want? I’ll give you some simple steps:

• First for every dream determine what the preconditions are, write them down. Don’t judge if it can be achieved or not, just write it down.
• Next check if there are any financial needs attached to achieve the dream. Some easy dreams which involve finance are financial freedom, retirement, child education, marriage, and house.
• Now once you determine that financial needs are attached, let us try to make them measureable. Put a figure against each dream.
• This step becomes much easier, now we need to decide where we invest to meet our financial dreams. This is a very important step, as this will tell you how much time you have to achieve your dream. Every investment option has a risk attached as well as the return. So depending on your risk appetite, your timeframe gets determined. If you feel that the timeframe is too high and you want to give up, meet a practicing financial planner. He will determine your risk appetite and give you a better idea on how to achieve your dreams.
• The financial planner would also be able to do the categorizations of your dreams into short, medium and long term, depending on your current wealth and income. As depending on the category of your dream, your investment need to be done accordingly. The Planner would also do proper diversification of investments, taking into account you tax bracket as well. We often forget the tax angle, your investments should be tax efficient.

These simple steps and your financial goal is set. Let me tell you, once your financial goal is set, all your other reasons and excuses disappear and your dreams become more achievable.

Convert your child’s future into reality

The moment a child is born, we see the parents very happy. Not only parents but also the friends and relatives. A few days on everyone starts having big dreams for their children. It’s good to have dreams, but we also need to works towards achieving those dreams. The two most important dreams the parents have are child’s education and marriage. If you have actually seen over the years the cost of education is just going up. Competition among children is also going and parents are also competing with other parents to show that they can give their children better education. Earlier all students used to study through the state board. Then slowly as awareness spread parents moved their children to CBSE and then ICSE and god knows what else is on the cards.

Whatever is on the cards, the cost of education is and will keep going up. So what should you do? Start now. Start a SIP which will be used only for your child’s education. As I have said many times the earlier you start the amount you need to keep aside remains small, with every passing year the amount to be kept aside keeps increasing.

Start with the following:

• Define your goal i.e. what sort of education you would like to give your child, what is the current cost of such education and till when you would be able to contribute to such goal.
• Start your contribution and remain focused, come what may, your dream and your child’s future depends upon you.
• Consult your advisor, to understand the risks involved in various types of investments and then take an informed choice.

If you start early your child’s future will definitely turn into a reality.