Invest in goals, not funds — the smarter way to investing

Why investment goals matter, and what kind of investment goals should you have?

Growth — no matter how small — is always beautiful

WHAT DOES THIS PROVE?

  • Save for my kids’ education (How much?)
  • Save for retirement (How much?)
  • Buying a house (Ok… Where? How big? Essentially, how much?)
  • Wedding of your children (How much?)

Problem #1. Defining that how much

Problem #2. Ignoring everything else

  • You always have more money parked in your savings account than required.
  • Once you factor in the inflation against the interest you are getting on your money in the savings account, you are actually losing money by keeping it in your savings account. (And we did not even talk about the taxes you need to pay on the interests)

We can pretty much save for everything.

  1. You spend around Rs. 50,000 every year in the three months between Durga Puja and New Year.
  2. You get yourself a new phone every year — Rs. 25,000 to Rs. 60,000 (depending on the model, whether it is an Android or an iPhone etc.)
  3. You go on a shopping spree every 6 months (onset of Summer, onset of Winter) — Rs. 15,000 to Rs. 20,000 each time
  • the flexibility of investing small amounts every month
  • no stress of a lock-in period
  • no penalty on pre-mature withdrawals
  • fast and easy withdrawal process

The benefit?

  • You are getting more than twice the interest on this money as compared to what your savings account would have yielded. The interest rate is typically 20–30% higher than even what you would get on your FDs (fixed deposits).
  • You are free to withdraw money for any expense that comes across. The withdrawals are instantaneous, happen 100% online (no need to visit the bank), and you can withdraw any amount you need.
  • Unlike FDs, there is no penalty or hidden charges on these withdrawals.
  • You can make multiple withdrawals
  • Unlike an FD, you don’t need to make a full withdrawal. Partial withdrawal is possible, and you continue to enjoy the same benefit and interest rates on the money that remains invested.

BUT WHY GOALS? WHY NOT SIMPLY INVEST?

THE SHORT AND CRISPY VERSION

#1. Investments do not need to be vague, or long term, or even substantial in size. Any amount of money you put in for growth is an investment.#2. Have goals for your investments. It helps you to maintain a firm grip on your financial health at any time. It also increases liquidity as well as maximise growth.#3. There are investment options where you can achieve more returns and yet maintain almost the kind of liquidity your savings bank account provides. Use them well.#4. Any large incidental expenses that you can foresee — buying an expensive new gadget, getting some new furniture, re-painting the living room, a one-week long trip with your girlfriend — they can all be covered by investing wisely. Helps you save almost 20–25% as compared to what you end up paying your bank in the name of EMIs.

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Abhishek Anand

Helping businesses grow 10x faster, and scale efficiently. Top Writer — Quora, Medium. Drop in a line if you’d like help with yours. mail@abyshake.com