Setting goals is, perhaps, an important part of financial planning.
Goals define the way you should invest and, more important, the instruments you should use to achieve these.
For example, if you want to purchase a house after five years, investing in equity would help.
On the other hand, if you plan to travel abroad next year, a more conservative approach such as investing in debt instruments would be appropriate.
But, goal-setting is also a function of your age and means.
Often, those who are single aim for the impossible -- the latest car in a year, a flat in a prime area in two years and the latest gadgets -- all at the same time.
Financial planners have a simple advice for such people: Keep goals reasonable.
An analyst says,"Therefore, single people must be careful with their financial goals and investment decisions to ensure a seamless transition after marriage."
While he intends borrowing the amount for down payment from his father, he plans to stop his investments, at least partly, for repaying his loan.
As most home purchases are made on loans, the ability to finance a loan after marriage may not be known at this point.
Also, the plans of single people tend to be uncertain, he says.
For example, there may be sudden plans for higher education or shifting cities and such a liability may be difficult to shoulder.
Instead, it makes more sense to continue with the equity investments.
The corpus created can be utilised for multiple goals in future, including the down payment of a house, he adds.
Besides a house, many go in for an expensive car on loan too soon.
As of now, one should concentrate on creating a corpus that will help make these purchases in the future with as little loan as possible.
Typically, young people should be aggressive on equity, as their risk-taking ability and time horizon is much higher than senior citizens.
But, having an emergency corpus -- at least six months' salary -- in debt instruments will help in troubled times.
Source: http://www.rediff.com/business/slide-show
Follow us: www.facebook.com/karvywealth
Goals define the way you should invest and, more important, the instruments you should use to achieve these.
For example, if you want to purchase a house after five years, investing in equity would help.
On the other hand, if you plan to travel abroad next year, a more conservative approach such as investing in debt instruments would be appropriate.
But, goal-setting is also a function of your age and means.
Often, those who are single aim for the impossible -- the latest car in a year, a flat in a prime area in two years and the latest gadgets -- all at the same time.
Financial planners have a simple advice for such people: Keep goals reasonable.
An analyst says,"Therefore, single people must be careful with their financial goals and investment decisions to ensure a seamless transition after marriage."
While he intends borrowing the amount for down payment from his father, he plans to stop his investments, at least partly, for repaying his loan.
As most home purchases are made on loans, the ability to finance a loan after marriage may not be known at this point.
Also, the plans of single people tend to be uncertain, he says.
For example, there may be sudden plans for higher education or shifting cities and such a liability may be difficult to shoulder.
Instead, it makes more sense to continue with the equity investments.
The corpus created can be utilised for multiple goals in future, including the down payment of a house, he adds.
Besides a house, many go in for an expensive car on loan too soon.
As of now, one should concentrate on creating a corpus that will help make these purchases in the future with as little loan as possible.
Typically, young people should be aggressive on equity, as their risk-taking ability and time horizon is much higher than senior citizens.
But, having an emergency corpus -- at least six months' salary -- in debt instruments will help in troubled times.
Source: http://www.rediff.com/business/slide-show
Follow us: www.facebook.com/karvywealth
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