Goal-Based Planning
Most people start with the question "which fund should I buy?". That is the wrong end. Goal-based planning starts with what the money is for and when you need it, and lets those two answers decide the product.
Distributed by Naveen Kumar Pandey, AMFI ARN-276664, EUIN E521164No consultation fee
What this actually is
A goal has three parts: a target amount, a date, and how badly it would hurt to miss it. A house down payment in three years and a retirement corpus in twenty-five years are not the same problem, and they should not be invested the same way.
We put a rough inflation figure on the target so the number is in future rupees, not today's. School fees and weddings have historically risen faster than general inflation, and planning against today's price is the most common mistake we see.
Then we work backwards to a monthly figure. If that figure is more than you can manage, we say so and we adjust the goal, the date or the risk — rather than papering over the gap with an optimistic return assumption.
Key facts
- What it costs
- Nil. There is no planning or advisory fee
- How long it takes
- One conversation of about an hour, plus a written plan afterwards
- Languages
- Hindi or English, whichever you are more comfortable in
- Obligation
- None. Some plans end with us saying you do not need a new product
This suits you if
- Parents planning for school, college or a wedding
- Couples saving a down payment
- Anyone who is saving regularly but is not sure it will be enough
- People with several goals competing for the same salary
How it works, step by step
List the goals and put dates on them
Every goal, including the ones you have been avoiding. A goal without a date cannot be planned for.
Convert to future rupees
We apply a sensible inflation assumption so the target reflects what it will actually cost then.
Check what is already there
Existing savings, EPF, insurance policies, property, gold. Often a goal is closer than the client thought.
Work out the monthly figure
Per goal, with a return assumption we state openly and deliberately keep conservative.
Match products to horizons
Near-term goals go into safer, more liquid places. Long-term goals can carry equity. Never the other way round.
Write it down and revisit it
You get the plan in writing, and we review it once a year or whenever your income changes.
What can go wrong
Every product has a downside. Here is this one's, in plain language, before you decide anything.
- A plan is built on assumptions about inflation and returns. Both can be wrong, so the plan needs revisiting — it is not a one-time exercise.
- No plan can create money that the income does not support. Where the gap is large we will tell you the goal has to move.
- This is general financial planning, not personalised investment advice under the SEBI Investment Advisers Regulations. We are a distributor and are paid by the product providers, not by you.
- Nothing in a plan is a guarantee of any outcome.
Questions people ask us about this
Do you charge for making a plan?
No. There is no consultation or planning fee. We earn a commission from the fund house or insurer only if you go on to buy something, and that is built into the product.
What if the plan says I cannot afford my goal?
Then we say that plainly, and we look at the three things that can move — the target amount, the date, or how much risk you take. We would rather tell you early than let you find out in fifteen years.
Do I have to buy something at the end?
No. Some of our planning conversations end with us telling a client that what they already hold is fine and they do not need anything new.
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Still deciding?
Ask us anything about this product — including how we are paid on it. We will answer straight.