Question

Identify some actions to take to achieve financial goals.

Answer 1

Answer:-

Financial goals are the objectives you set for a specific goal to be reached

Example:-Paying of debt, Planning for Retirement, Emergency Fund, Buying a House , Savings for Vacation and so on.

Steps to Achieve a Financial Goal

1) Categorize

2) Prioritize

3) Strategize

4) Implement the Strategy

Explaining each one in detail

1) Categorize

Suppose you have too many goals in your mind which included-Paying of debt, Buying House, Children’s Wedding, Revamp House etc.

Too many factors can derail your goals, thus it is required to smartly categorize your goals.

Goals should be SMART- Specific Measurable Achievable Relevant and Timely

Let’s take an Example

Goal-“Save 10 lakhs for Children’s wedding”

Specific- Is it Pure financial goal? Or a hybrid goal? Mention the time required.

Measurable- Mention the tentative amount you would require.

Achievable-Set a target and accordingly how much would be required to save monthly or yearly.

Relevant-Make relevant goals which includes- Are you going to settle in that city?

Is it for Investment purpose?

Timely-Time which is needed to achieve the target

2) Prioritize

Prioritize on the basis of needs and wants

Example

Buying a house-Need

Children’s Education –Want

Revamp House-Want

3) Strategize

Having a list of clearly defined financial goals is a start.

But, you need an investment strategy to achieve them.

It included Following steps

1) Assess Today’s Cost of Your Financial Goal

Example- Ask somebody how much he spends on his child’s education or wedding

2) Adjust Financial Goal Specific Inflation

Inflation is going to increase the value of all your financial goals every year.

You have to find financial goal-specific inflation for your financial goals.

If one fail to do this it will led to wrong estimation of the amount

3) Asset Allocation for your Financial Goals

Allocate it as per the risk of the asset

4) Expected Return form the Asset Class

4) Strategize

Example:- If u want to invest your fund in equity

What to choose? which allocation will give maximum return? Weightage of allocation of your savings in multiple investments

Conclusion

Your dreams are only dreams until you write them down. Then they are financial goals.

Prepare a SMART checklist—they transform into objectives. Prepare the strategy, they transform into achievable objectives. Implement it, you are in the game.

Reckless investors perish. But the one with a solid financial plan wins every single time.