How to organize your financial goals?

Did you ever measure your dreams using a measuring tape before you actually started dreaming? The answer most certainly is no.That’s the best part. Be it of any size, you don’t and shouldn’t stop dreaming. Let’s take the example of this young guy from Mumbai who wanted to invest in an igloo in the Arctic region. Now, isn’t that a unique dream? That said, the main issue for him was not the bizarre nature of his dream. The fact that he didn’t think strategically about his dream couldn’t make ithappen. The two main problems were that he thought it was a far-fetched idea and financially non-viable given his current financial situation. Reality check suggested that he just didn’t know how much his dream would cost. He simply assumed that building an igloo was an unachievable dream and thus, let it die.

 

What we need to understand here is that nobody needs to give up his/her dreams even without reviewing its prospects. Be it of any nature, the only way you can achieve your dreams is by converting them into achievable goals. A dream can become a goal only if you put a price tag and a time frame on it. You can decide on a figure, for instance, Rs. 2 crore, that you need to spend to achieve you dream within 15 years. This would be a good starting point.

 

It is very crucial for you to note that it becomes much easier for you to achieve your goals when you create a good financial plan.This plan would act as a road map to help you monitor the progress of your goals. Modern financial planning is all about adopting a goal-based approach to managing your financial resources effectively. However, you must remember that the goals you set must be SMART – Specific, Measurable, Achievable, Realistic, Timebound, for you to achieve them.

 

Going back to the example of the young lad from Mumbai, let’s now see whether his dream of buying an igloo is an achievable one or not. Let’s assume that the lad’s post-tax income is Rs. 30 lakhs, and that he has saved~ Rs. 60 lakhs as of today owing to good savings culture. Now, on conducting a Google search, heestablished the fact that an igloo in the Arctic region would cost him around Rs. 45-50 lakhs, which maynot be as expensive an investment proposition as envisaged earlier. Let’s assume he gives himself a time horizonof around 5 years to buy the igloo, which means the pricecould increaseto around Rs.65-70 lakhs. Once he would purchase the igloo, he has planned to rent it to a timeshare company. Therefore, his dream to buy an igloo was not as unrealistic as he felt at first, once he followed a SMART goal-based approach towards investment.

 

No matter how big your dream is, a goal-based approach towards investing would help you geta clear target to aim with stronger precision. Once you combine well-defined goalswith a financial plan, you would have most certainly found the key to unlock all your major dreamsin this life successfully. Please note that you may have the financial resources, it is just that you need to plan the way you use them optimally.

 

Read our article to know more about effective savings tips, investments, and financial planning,

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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