Yojak‘s friend Alok has just shifted jobs and got a better pay package.

Alok plans to invest this additional money, so Yojak explains the concept of goal based investing to Alok:

Goal based investing gives direction to your investments where you invest in a systematic and disciplined manner to achieve your goals.

It involves planning and investing-

You need toidentify and prioritize your goals:

Goals could be short term with a time frame of a year such as a car or vacation

Or Mid term with time frame of 1-5 years such as buying a house

Or Long term with time frame greater than 5 years such as child’s education or retirement

Basis your goals look at your existing resources and choose the right investment products to create a road map to meet them.

Goal based investing increases ones commitment to life goals and gauge tangible progress towards them.

It helps bring predictability towards achieving goals and allows you to take optimum risk at various stages. 

Alok decides to plan his goals with his family and follow goal based investing. What about you?