Everyone has needs and aspirations. Most needs and aspirations call for a financial commitment. Providing for this commitment becomes a financial goal. Fulfilling the financial goal sets people on the path towards realizing their needs and aspirations. People experience happiness, when their needs and aspirations are realized within specified time.

is an investment methodology where performance is measured by the success of investments in meeting an individuals personal and lifestyle goals.are the full set of resources the investor has available, including financial assets, real estate, employment income, social security, etc. while theare the financial liabilities such as loans, mortgages, etc. Goal Based Investing takes into account the progress against goals which are categorized as either essential needs, lifestyle wants or legacy aspirations depending on level of importance to an individual or family.

Goal- basedinvesting seems like an obvious tactic. After all, dont all investors have goals? But many investors have only a vague idea what their goals are, much less how to achieve them.

1. Short Term Goals (0-1Year).2. Medium Term Goals (1-3Years).3. Long Term Goals (3-10Years).4. Very Long Term Goals (10-30 Years).

Different Approach: Financial Goal Retirement*

Let us understand in detail, how your retirement goal should be planned.

Let us assume that you are willing to retire at the age of 60 years and your current age is 35 years, means you have 25 years to go for retirement. Your current monthly expense is nearly about INR 50000/-. ( House Rent= INR 10000/- ; Child Education= INR 5000/- ; House Hold Expenses= INR 25000/- ; Entertainment Charges= INR 2000/- ; Emergency Fund= INR 5000/- ; Miscellaneous Fund= INR 3000/-).It is also assumed that one time trip charge you go with your family every year is about INR 30000/-. Annually you need INR 6,30,000/- to meet your life style.

Further it is assume that you will meet about 80 per cent of your current expenditure at the time of your retirement i:e, at the age of 60 years, which is around INR 5,04,000/- (=80% of 630000). Inflation should be around 7.50 per cent. (assumption)

Now, the real planning begins. Looking at your current age and income, determine how much money youll need to save each month–and how big a return youll need on your investments–to produce the desired monthly income when you retire. This has almost nothing to do with yourrisk tolerance or your target date and more to do with the reality of your current income, the amount you can afford to invest and realistic expectations for market returns.

In the above example, you need almost INR 2,56,130/- when you retire as a monthly expense. Let us now consider different scenarios at different rate of returns on your monthly investment:

SIP amount required to invest to achieve the said corpus

* The above example is only for illustration purpose.

Goal-based investing is more precise, detailed and nuanced than the more traditional save as much as you can approach. It requires some serious planning. But developing a true understanding of what you hope to achieve will allow you to make the necessary adjustments to reach your goal.