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POSTED BY ON June 19, 2012 8:24 pm ONE COMMENT
One of the person i know has this problem with fixing goals with respect to finances. He just doesn’t like it and any target number makes him anxious . He doesnt let anyone calculate what is the figure he needs for retirement or any other goal for that matter.
But he has a 10 times insurance cover of his salary and is investing 10-15K a month in both direct equity (5K) and MF(10K). His portfoilio except PPF and EPF is in Equity.Pretty much 90%. He just doesn’t want to set the goals.His retirement is at least 20 years away.
I am not sure how to tell him about importance of goal based investment.He wont discuss if i say any numbers 🙂 . I don’t know how to explain it to him.
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I think he is going in great direction . Settings the goals is for those who do not maximize their investments and want a number . If a person does maximum saving which he can and puts all of that to best use .. Thats the best planning .
Consider this , I have Rs 20,000 per month left for investment per month , This is my best capacity . Now one option is to put all of that in some investment and consistently do that ..
The other option is to calculate things and arrive at a SIP figure of Rs 13,450 per month . This gives me a chance to say “Hey .. I can use the rest of the money anywhere and that is ok” . This brings limitation . This brings closed boundries for me .
Hence your friend is actually doing much better than others . Dont disturb him 🙂 . What you think is his weakness is actually turning out to be a great strength .
The only exception will be when he is not doing his best . Like if is investing 10-15k per month . But if his requirement is Rs 25,000 and if we adjusts things , he can really reach that figure . In that case he is at disadvantage right now . But if 10-15k is his maximum limits , anyways he cant do anything about it 🙂 .
Manish