Here is a great peice of advice from ‘Subramoney‘ for all the confused folks like me.

Subra Sir,
Goal setting is very important aspect of any effort financial planning may being one. But I always have one query. Imagine if all of my goals are somewhere about 20 years down the time, do I still have to allot different financial slots for different goals. I mean if I want to invest thinking about my daughter’s marriage (20 years away) and my son’s education (20 years away), Do i still require to allot separately to different instruments of investment. I will want money to increase in the best possible way for both goals isn’t it? then why two different slots for the same capital appreciation required?
Suppose with my research I construct a portfolio for capital appreciation which I believe is good then I shall apply the same for both goals, I will not want one slot of my money to grow less than the other slot isn’t it?
Near the end of appreciation period I need to withdraw and then I can make switches, withdrawals slowly or shift some amount to less riskier instruments. But till then cant all the money grow unitedly instead of in different slots

What am I missing here?
Please enlighten me
Kishan

Not all people are so clear or perhaps not so lucky. Most people have short term goals (buying a car, upgrading a house, going on a vacation, etc) and long term goals like retirement.

Also many people HAVE TO BE FORCED to save. For you if saving and investing come naturally, you do not need separate packets to keep the money. When kids were born to Mr. Kumaramangalam Birla he did not start 2 sips! That is because he has the wealth mindset already. So if you are clear that you will invest (say in an index fund), have term insurance, have one unused credit card and one fully used credit card….only thing you need to do is to say NO to new products.

Keep putting all your excess money into one liquid fund (or even MIP -short term), long term money into the equity fund. When you know your date of needing the money, withdraw from MIP or liquid funds. Simple, aint it?