How a Mutual Fund Planner can help you to reach your financial goals

All financial goals, regardless of whether they are short term or long term, require advance planning and structured execution. Not long ago, traditional investment plans like FD’s used to form the backbone of goal based savings for most of us. In recent times, though, more and more smart investors are turning to mutual fund planners to help them with their goals. The total industry assets recently are nearing the 40 lakh crore mark as on date. If you’re contemplating using Mutual Funds to plan for your future Financial Goals, here are a few ways in which a mutual fund investment planner can help.

Start with a Plan

Instead of just making Mutual Fund investments in an ad-hoc manner, or just informally mapping your goals onto an excel sheet, start with a comprehensive Financial Plan. Doing so will lend a lot more perspective to your goal-based savings by helping you analyze your cash flows better, often eliminating or reducing unnecessary recurring expenditures and freeing up more surpluses for your goal based investments. Reviewing your plan annually with your Mutual Fund investment planner will also keep your savings aligned to your changing life scenario always.

Ignore your risk appetite

Regardless of your personal risk appetite, you need to make the time remaining to your goal as the single deciding factor for fund selection. For instance, you may be a risk averse investor, but that wouldn’t justify choosing low-risk debt funds for say, a retirement goal that’s thirty years away. In this case, the cost of conservatism may run into lakhs or crores! Additionally, the long-term nature of your goal would absorb much of the risk of losing capital. Conversely, even flamboyant risk takers need to adopt a more muted stance while planning for goals that are short term in nature. Investing into equity oriented funds for a goal that’s just two or three years away, could give rise to a scenario where you’ll need to book losses while pulling capital when your goal date arrives. Your Mutual Fund Planner can help you choose the best SIP’s for your goals.

SIP it

Instead of choosing to invest money towards your goals as and when surpluses become available, inculcate discipline into your goal based savings through monthly SIP's (Systematic Investment Plans) . If you don’t put your goal based savings on auto-pilot through SIP’s, you’ll surely find it taking a backseat every month in the face of some large ‘unplanned’ expense or the other.

Step it up annually

Start with whatever is comfortable – but make sure you step up your goal based savings at regular intervals. Many Mutual Fund SIP’s have inbuilt “step up” features which automatically step up your outlay on a periodic basis, by a pre-decided percentage. Stepping up your monthly SIP’s can make a huge difference to your long-term wealth creation, greatly improving your chances of achieving your financial goals. Your Mutual Fund Planner  can come up with a customized step up plan that will be comfortable on your pocket but keep you on track to meet your goals.

Tracking is key

It’s an unfortunate truth that many a well-intentioned goal-based investment fails within a few months or years of getting started. Ideally, your mutual fund planner should use tech tools to “keep score” can go a long way in keeping you aligned to your end objectives. A tracking tool that measures your goal achievement to date, distance left to your goal, and other important parameters, can contribute more to your success than you think! As Karl Pearson once said: “What is measured, improves”