How to set your Financial Goals

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 What are your Financial Goals?

This depends on 
your age and 
your money requirements at different stages of your life.

Secondly, consider your asset allocation. 
That is out of the total money that you want to invest - 
 - How much should you put into Equity Investments of a stock market and
 - How much in Debt Investments like - Insurance, Fixed deposits and then
 - How much in Other Investments such as Real Estates, Gold and so on..
This is called Portfolio Diversification or in simple words, it ensures that you do not put all of your eggs into one basket. So even if one Asset class does badly, your risk is spread out over other asset classes.

To help you understand the importance of managing your portfolio and how to plan your asset allocation, it might be a good idea to consult a certified financial planner. 

How important is it to take your financial goals into account before deciding how much to invest.  

Financial Goals are like a destination. 
That's where we want to go?
We need to know where we want to go?
How we are going to go?
When do we want to reach?
Based on above, we should do our entire planning. 

Similarly, when you embarking on your journey of 
Wealth Accumulation
Wealth Creation
You need to know all above, because based on that, you will decide, 
 - which asset classes, 
 - what kind of portfolio, 
 - what kind of diversification, 
 - what are the hurdles that can come in life which can be tackled with the help of insurance.

What do you mean by portfolio diversification? How to plan your portfolio diversification?


To understand this, take an example of cricket team where all players are Bowlers or Batsman, and then you realize that this is not the way, We need the combination of some batsman and some bowlers, wicket keeper.
Similarly, your portfolio should consist of different Asset Classes based on your Financial Goals and Risk Apatite etc.

So basically portfolio diversification means making investments in different assets classes, which is well balanced as per your goals.


To invest directly in Equity

https://cakamalgarg.blogspot.com/2021/11/how-to-set-your-financial-goals.html

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