Indians have always been considered to be ‘good savers’. Saving is certainly a good habit but it can be quite pointless if these savings aren’t connected to the goals.

Our savings might move to investment, driven by one factor: profits or Returns. By approaching savings and investments in the right way, one could end up creating goal based corpus, by making the most of what the market has to offer. But imbalances in this approach might result into nightmares. Sometimes the greed of creating more and more money out of the investment portfolio end up even losing whatever financial assets one might have accumulated or might fall short during the time it needs to be liquidated.

A goal based approach to investing is the best way to make the most out of the surpluses. When one set a particular goal that caters to ones’ unique need, he or she gets emotionally invested in the process and tend to save and invest diligently to meet the goal. Moreover this process accounts for ones risk appetite and time horizon, so the investment options are best suited to meet his or her needs. Hence those who invest towards goals end up more successful in their investment endeavours and live a happy retirement life.

There are a few important things to remember when you decide to go the goal based investment strategy.

• When one is investing in long term goals, he or she should not be hasty in making judgements about this approach not being profitable. This is because short-term performance isn’t the best indicator of overall position and shouldn’t be used as an instant for success. If one is stick to goal-based savings and investment plan diligently, he or she will surely have more purchasing power in the future.
• Our priorities and goals keep on changing. So, it is important to review and re-plan any goals that might become irrelevant because of changing life style.
• Money holds different meanings for different people. For some, it could mean a security from future uncertainties or access to education, while for others, it could mean the ability to travel or buy whatever one wish to. No two people will ever have the same goals that make them happy and so trying to match ones goal with others is a pointless.
• There’s no shortage of sources for advising for securing money: family, friends, colleagues, financial agents, planners, etc.  If you end up taking on all the advice given to you, it would result in a combination of products that might not necessarily go together and could end up hurting you instead.
• Sometimes a reason (search for a better profitable option) might postpone the regular contribution to investment vehicle. This postpone should not  create a huge gap to the regular contribution, otherwise it might affect both the time horizon and the needed corpus.