Monday, November 6, 2006

Financial Goals

It's easy to talk theory about the importance of financial planning. How about a financial goal & objectives document for myself. Hmmm...., well I would like to segregate them into Ultimate goal, long term goal/s, and short term goals.

My ultimate goal would be to be able to not getting influenced by money!! More specifically, I will want to be able to survive without bothering about money. It may seem a bit paradoxical now, but the only way to get over the "greed" is to work at it. Go to a pshychologist and he'll suggest that the only way to overcome fear is to face them.

It's also important that I plan my resources so that I may do what I want to do without bothering about money. At my stage of life, I'm responsible towards my family more than myself. A growing kid and the ever dependable wife. It's vital that they are provided for in full measure before I venture out on my own "purpose of life". This leads me to my long term goals, and they are:

  • Build a networth of Rs 10,00,000 by 2012 for my son who will be 18 then. It will take care of his studies. Though I believe Kabir when he says that: " poot sapoot to kyon dhan sanchay, poot capoot to kyon dhan sanchay", it's a different issue.
  • Bring my mortgage debt to zero by 2016, another ten years from now. Currently it's Rs 10 lac.
  • Build a corpus of Rs 25,00,000 for my wife so that she can survive with interest @ 10 % by 2012.

This exercise leads me into the question whether I have the required resources to achieve the above targets. Infact, an assessment of my current financial situation should have preceeded this goals exercise. But since I'm a bit wary of sharing that, let me assure myself (and you too!!) that the resources are there for sure!

But with the current resources I need to earn atleast 15% CAGR to reach the targetted goals. This leads me to my short term goals, and they are:

  • Understand the various investment options available by 31st December, 2006. Write my understandings so that I can check back and it can serve as my e-scratch pad.
  • reallocate my investments by 31st December, 2006.
  • Learn, learn and continue learning about investment.

And since it's my own blog on Finance, I must continue to update this. And maybe edit it too (this post only!)

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