Thoughtful Thursday #06 – Are you KYG (Know Your Goal) Compliant..?

As you all are aware, without KYC you cannot start your investment. I wish it was equally mandatory to have KYG (Know Your Goals) !

As we believe,  “People Don’t plan to fail but They Fail to plan..”

Everyone has their own list of Goals such as vacations, child’s education, child’s marriage, a bigger house, a holiday home, a dream car, a peaceful retirement, etc. All of these Goals, have a financial implication. To accomplish these, we either take a loan or make an investment or a combination of both.

Generally, following are the Goals as per human life cycle.

Definition of SMART Goals

Lets make it more Simple. Ask yourself following 4 questions for SMART Goal setting.

We will see one example of setting a SMART Goal.

Say, Mr. Kapoor has a daughter aged 3 years. One of the Goals he is considering in the Financial Plan is Child’s Education.

Goal Details Post Graduation
Fund Required at Today’s Cost  Rs 15,00,000
Child’s Age will be 21 years
Goal Year 2036
Inflation
(Education Inflation is considered @10% based on data available)
10%
Future Value (Corpus Required in 2036)  Rs 83,50,000

YES! You read it right, Rs 15,00,000 Today will cost you approx Rs 83,50,000 in 2036.

So, if the Goals are not appropriately set we may have to use our Retirement Corpus or other investments for this Goal and I am sure no one will allow their child’s education to suffer because of lack of funds. But what we will compromise here as our Retirement Corpus will also impact us in Future. So take caution in setting Financial Goals.

The SMART Goal here in the example is : Mr. Kapoor requires Rs 83,50,000 in 2036 for his daughter’s  Post Graduation. Now, Mr. Kapoor has 3 choices to achieve this Goal:

Particulars % in CAGR*
7% 10% 12%
Monthly Investment Required                  19,400               13,900                  11,000
OR
Invest Lumpsum             23,95,000             14,11,000               9,94,000

*Compunded Annual Growth Rate

This is one of the many Goals Mr. Kapoor will consider as a part of his Financial Plan.

Guys, Please Remember, its Personal Finance, always personalise it. Define your own Goals and get a customised Financial Plan for yourself. What may be applicable to one person may not be applicable to another.

We will help you to set your Financial Goals and Develop a customised Financial Plan for yourself. For more details contact us at info@nimitwealthmanagement.com

CA Nitesh Buddhadev

CA Mitsu Buddhadev

NIMIT Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

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4 thoughts on “Thoughtful Thursday #06 – Are you KYG (Know Your Goal) Compliant..?”

    1. Thanks Pranali. The kind words from our readers inspire us to work more on this.
      Sharing is caring, Do share these articles with your friends and family.

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