When we meet many of our clients and suggest they set their important financial goals, most of them become clueless.
So that’s the issue with our relationship with money. We want to become rich; we want to earn a big return; we want to brag about our portfolio but fail to plan the specifics. No wonder whether your portfolio does well or behave miserably, we remain confused. Should we remain invested, book the profit, invest more or altogether get out of the market?
Now, we have altered our communication and start asking-
Have you planned for your retirement?
Have you planned for your children college education?
Do you love travelling and if yes, do you plan it in advance so that it won’t affect your entire budget?
Do you have enough funds for any emergency situations so that you don’t have to break your investments?
And so on….
It makes a huge difference to your portfolio performance if you set financial goals which are very close to your heart and imminent for your family. This also helps you set the right asset allocation depending upon the nature of your goal, time horizon and alternate arrangements.
Even if you don’t think about any particular goal, at least start with the goal of “Attaining My Financial Freedom”. Simply stating “I want to earn best return without risking my capital” is not enough.
Manoj Pandey
CFP
