Last Updated on March 11, 2020 by Gopal Gidwani

Investment can be a broad concept of your financial planning procedure. Since the investment market can be massive in India, you might feel the need to park your funds in various investment products for the growth of your wealth. While the generation of wealth can be your sole purpose of investing, the right way to approach investing can be with the help of goal-based investing. Typically, goal-based investing is a relatively latest approach that can emphasize investing with the primary aim of meeting your desired life goals. It differs from the traditional investment plan as it helps you build a substantial corpus based on your financial goals.

Since goal-based investing has been catching only recently from last few years, you might be confused about how to go about it. Therefore, let’s go through the top five tips mentioned below. It will teach you how to generate wealth using a goal-based investment approach.

1) Identify your investment goals
As an investor, you might have specific goals in mind for you. Your short-term goals can be building an emergency fund, funding your child’s education, etc. Your long-term goals can be saving for retirement, starting a new business venture, and so on. When you stick to the goal-based investing at a young age, you can spend more in the future as you grow older. Moreover, prioritising your goals can allow you to turn your unfulfilled dreams into reality with the right financial support.

2) Do not rush into investments
The right investment tool can let you accumulate wealth as well as earn relatively high returns. Many of you might opt for investment in a hurry to make profits. However, rushing into investments might not be the right choice. Before choosing any investment instrument, you should research multiple investment plans in the market and select an appropriate tax saving investment option based on your risk appetite. Moreover, choose a policy, which can let you diversify your investment portfolio as you grow older.

3) Review your financial plan
As you cross specific milestones in your life, your financial goals might vary. For instance, when you get married, your primary goal can be the financial well-being of your spouse and your children. Since your needs can be dynamic, you should consistently review your investment plan. As you update your investment plan, you might be able to identify the amount of expenses you might require at every life stage.

4) Consider the nature of investments
There can be a host of investment products available in the market that can allow you to accumulate wealth as well as earn the desired rate of returns. Although you can select between multiple investment options, you should first consider your risk appetite and investment goals. For instance, if you have a long-term goal, you might require more money. Hence, you should invest in an aggressive investment product that can allow you to obtain relatively high return on investments, which, in turn, can allow you to meet your goals sooner.

5) Consult a financial expert
Investments can be a risky affair. Hence, you should consult a financial expert when it comes to money matters. Referrals and testimonials from friends and family can be beneficial. But, you should seek professional help to ensure the right guidance throughout the whole investing procedure. With the guidelines from a financial expert, you might be able to divide your investments proportionately amongst funds for the growth of your corpus.

In a nutshell, earning profits can be one of the benefits of investments. However, see to it that you don’t go overboard with investments. The right way to invest can be to start with a minimal amount at a young age. Since you might be goal-oriented when you are young, you might need adequate funds to meet your dreams. As your funds grow, you can increase the invested amount and generate wealth by the time you turn older. That way, you can achieve your life goals as well as accumulate an ample amount of fund value at the same time.