Goals based investing - A guide to the goals on Goalwise


We have divided the goals in Goalwise in two categories - Essential goals and Aspirational goals.

As the names suggest, Essential goals are the ones that we think you should take care of first and then if you have savings left, you should invest for the aspirational goals.

Let's look at the goals in the Essential category first.

1. EMERGENCY FUND

Purpose: To keep a sum of money aside for emergencies so that you don't have to disturb your long-term goals or land up in a situation where you have to borrow from your friends and family!

Goal features:

  • Fast redemption - If you withdraw the money before 12 PM, money will be credited to your bank account the next business day.
  • Gives you upto double the returns of your savings bank account

2. TAX SAVE

Purpose: To save taxes under Section 80C of the IT Act by investing in some specific Tax Saver Mutual Funds (ELSS). ELSS can give 7-8 times higher returns than other tax saving investments like PPF and Insurance cum investment schemes over the long term. You can read more about it here.

Goal features:

  • Shortest lock-in of 3 years amongst all Tax Saver investments under Section 80C.
  • Highest returns in the long term (compared to other Tax Saver instruments)
  • Best ELSS funds selected for you every year.

3. SMARTER SAVINGS

Purpose: A safe and steady substitute for your FDs and savings account with penalty-free withdrawals and long-term tax benefits.

Goal features:

  • Safe and steady
  • Penalty free withdrawals
  • Upto double the returns of your savings bank account.
  • Lower long term taxes - pay tax only on accrued returns over and above inflation. Read more about taxes here.

4. RETIREMENT

Purpose: Most of us won't get any pension. Many of us want to retire early. But are we actually planning for it? This goal is for the most important aim of investing - so that you can stop working for an income as soon as possible!

Goal features:

  • Automatic asset allocation between equity and debt Mutual Funds based on your risk profile and time left for you to retire.
  • Best Mutual Funds for long term investing selected by our algorithms
  • Automatic switching of Mutual Funds to better ones every year as and when needed.
  • Automatic decrease in risk and stock market exposure as you come closer to your goal. More debt as you come closer to the end of the goal so that your retirement corpus is not affected by any market downturn towards your retirement age.

5. CHILDREN

Purpose: To give your child the best education or a memorable wedding. This goal is to help you save for your child's needs in the future.

Goal features:

  • Automatic asset allocation between equity and debt Mutual Funds based on your risk profile and time horizon of the goal.
  • Best Mutual Funds for long term investing selected by our algorithms.
  • Automatic switching of Mutual Funds to better ones every year as and when needed.
  • Automatic decrease in risk and stock market exposure as you come closer to your goal.

Those were the essential goals. They cover most of our important financial goals. Now, let's look at the goals in the Aspirational category.

6. WEALTH

Purpose: To invest any surplus that you don't need in the short term (only once the essential goals have been taken care of) to build wealth. Financial goals of wealth and retirement are different in the sense that the retirement money is almost a necessity, sort of a minimum corpus required to maintain a decent life-style when you retire. Wealth is more of a general investing goal. The difference is more than semantic because we treat the asset allocations of both goals differently as time passes, although you could choose either if you were starting out.

Goal features:

  • Asset allocation between equity and debt Mutual Funds based only on your risk profile.
  • Best Mutual Funds for long term investing selected by our algorithms.
  • Automatic switching of Mutual Funds to better ones every year as and when needed.
  • Rebalancing between equity and debt to be in sync with your chosen risk level despite market ups and downs.
  • No automatic winding down of equity exposure as in retirement.

7. PURCHASE GOALS (Vacation, Luxury Purchases, House, Custom)

Purpose: These are short to medium term goals to set aside money to purchase things that are expensive and exciting like a foreign vacation, the Harley Davidson you always wanted or the Sedan you had dreamt of driving around the city!

Goal features:

  • Similar to goals like Children's education etc.

Comparison table for all goals