Denounce with righteous indignation and dislike men who are beguiled and demoralized by the charms pleasure moment so blinded desire that they cannot foresee the pain and trouble.
Read MoreEstimating Savings For Goal
How Much Should I Invest for XYZ Goal?
This template will help you determine how much you should invest now (lumpsum) for your goal.
The template considers factors such as:
- Priority of Goal (High/Mid/Low): High priority goals make more conservative expected returns assumption than low priority goals.
- Investment Horizon: The duration for which you intend to hold the investment.
- Asset Allocation: Determines your ability to take financial risk. An aggressive investor might opt for 100% equity, whereas a conservative investor might prefer 100% debt.
We have divided the asset allocation into gears (draw parallel to car gears):
- Gear 6 | 100% Equity, 0% Debt | Aggressive
- Gear 5 | 80% Equity, 20% Debt | Moderate to Aggressive
- Gear 4 | 60% Equity, 40% Debt | Moderate
- Gear 3 | 40% Equity, 60% Debt | Conservative to Moderate
- Gear 2 | 20% Equity, 80% Debt | Conservative
- Gear 1 | 0% Equity, 100% Debt | Ultra-Conservative
Key Observations:
Investing in equity is not suitable where your investment horizon is short since there is about 30% probability that you might experience negative return if invested for 1 year.
