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Achieving Your Financial Goals

Mutual funds allow investors to focus on their work and personal life, and leave the modus operandi of investing to professional fund managers

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Have you ever won-dered why financial goals are sometimes difficult to attain? Consider this: we all know how important it is to have a map when driving in a different city. Maps help you gauge if you’re moving towards your destination. Likewise, without an investing tool and a financial map, attaining financial goals may prove to be difficult.

Mutual funds serve as that vital goal-achievement tool. They select the most appropriate investments for us and can be used to reach goals or investment destinations. Mutual funds are investment schemes that can be used by anybody — from professionals to housewives, and they do not require investment expertise.

Get Started First figure out your goals, be it buying a new car to saving for a holiday abroad, and the likes. A goal enables you to aim for specific financial targets and see how you progress over the years.

Next, evaluate your various goals; prioritise them from the most crucial ones to the least. You even need to classify them as per duration, as long-term, medium-term, and short-term. For instance, retirement is a long-term goal, but buying a car is a short-term one; similarly, saving funds for the down-payment for a house could be a medium-term goal.

Map Funds to Your Goals
First, you must understand that mutual funds are investment vehicles; they invest in various financial assets such as stocks and bonds. Each mutual fund scheme has a separate investment objective and their investment portfolios vary. So, identify your goals, and select the most appropriate mutual fund schemes that would take you closer to them.

Fulfil the Agenda of Reaching Goals A common mistake most people make is that while they have a goal, they don’t have a schedule to help them attain it. Make regular and consistent investments and stick to them, whether the markets are doing well or not. The world’s best athletes hit the gym every single day at the same time, focusing on putting in regular hours of practice.

Additional Tools
Systematic investment plans or SIPs, in short are a means to directly transfer your investment funds from your bank account into the mutual fund schemes of your choice, regularly. This saves investors the hassle of remembering dates or repeating paperwork. And because of this automated system; investors automatically commit moneys regularly without even thinking about their goals, which is actually critical for their achievement.

Mutual funds allow investors to focus on their work and personal life, and leave the modus operandi of investing to professional fund managers. A fund house’s system and research capabilities enable its fund managers to pick suitable investments from the hundreds of options available. For investors, scanning these options themselves can be tedious.

But the key trait of investing regularly is this: over time, it accumulates and builds your investments into a solid corpus. For instance, if your goal was to be able to make a down payment for a house in the next three years, a combination of different investments in debt and equity funds, or a balanced fund could bring you closer to your goal.

With mutual funds, you can leave all your money-management hassles to a professional fund manager. It is this simplicity of mutual funds that is drawing millions of investors to them. Already, there are lakhs of investors benefiting from mutual funds; this is evident from the fact that there are about 5.2 crore mutual fund investment folios in India as on date. So, if you haven’t embraced mutual funds yet, start using this investment route in 2017 to bring yourself closer to your goals.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Nimesh Shah

The author is MD & CEO, ICICI Prudential Asset Management Company

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