How to Start Goal-Based Investing with Mutual Funds?
By Akhil Chugh
Date July 13, 2025
Invest money to have the right amount of funds at the time of “need.”
Here, the “need” is the financial goal.
From our childhood days, we have been taught that goal setting is fundamental to our long-term success. After all, it is difficult to get to the desired destination without clearly defining the destination. But once you realize what is important to you, the goals set by you will help you remain determined to achieve them.
Want to turn dreams into financial reality? Start by aligning your investments with your goals. Here’s how goal-based investing with mutual funds makes it simple, smart, and stress-free.
What is Goal-based investing?
Before you start a new investment, ask yourself an important question: What exactly are you saving and investing for?
This is a serious moment of introspection! In order to invest for the future, you are cutting back on spending your wealth now. There must be some future purpose for this sacrifice—a future goal whose present value and importance outweighs the pleasure of today’s spending.
Goal-based investing is not just “another fancy way” of saving money. Rather it is a new way of approaching wealth management. It focuses on investment from a more goal-oriented outlook. Goal-based investing is more like a philosophy that can help in identifying, quantifying, and designing an action plan for achieving various financial goals. The idea is to achieve a goal instead of chasing returns from financial investments. A financial goal could be buying a house, foreign tour, higher education, marriage expenses, setting up a retirement corpus, etc.
Goal-based investing is all about identifying your financial goals, setting a timeline for each one of them, and investing for them regularly to be able to reach them. The importance of goal-based investing is that it not only gives you a good investment strategy, but also a direction to achieving your dreams and in the process making your future stress-free.
Step-by-Step Guide: How to Start Goal-Based Investing with Mutual Funds
To achieve your goals, you must climb the ladder step by step. Here is a comprehensive step by step process to get you started with goal-based investing to achieve your goals:
1. Identification of financial goals:
“Goals” are a personal budgeting mechanism that has been around for hundreds of years! Remember your grandmother’s old system of separating money into tin cans – one for clothes, the other for groceries and the other for buying gifts? That’s the exact same rationale behind goal-based investing. By separating your savings into buckets for clearly defined future objectives, you’ll stay disciplined and will be reaping multiple benefits in the long run.
Investors should start by identifying their financial goals and the time available to reach that goal. When you allocate your assets based on your financial goals, you have a clear, well-defined, and realistic plan to achieve success.
2. Calculate your appetite to save and invest:
Once you identified and quantified your goals and figure out the investment horizon, it is time to ascertain how much you can save for investment from your monthly income. You must account for an emergency fund with at least 6 times of monthly income in liquid funds that is able to meet your expenses in case of any unexpected development.
For instance, let’s assume you want to plan higher education for your child 18 years away. Currently, it costs Rs. 50 lakhs. When you plan for it, you will calculate how much it will cost in the future after factoring in the inflation. So, assuming an average inflation rate of 8% in education, it will cost nearly Rs. 2crore in 18 years. Now you know how much money you will need for this goal. So you can download the Net Brokers app and use the Child Education calculator to calculate the required SIP amount that needs to be invested in mutual funds to accumulate the required corpus assuming a certain annual rate of return.
3. Assess your risk appetite:
Every investment has risks of its own. It is essential to know what your risk appetite is before investing. An ideal investment portfolio should be aligned to your financial goals based on your risk appetite and time horizon.
4. Pick an ideal investment instrument:
When you know the amount, you will need for a goal and know the time you have to accumulate that corpus you can effectively build your investment strategy. You can pick from asset classes like equity, debt, gold, etc., as per your investment horizon, risk appetite and financial goals.
For instance, if you have short-term goals like international travel, kid’s school fees, etc., your focus will be on investing the money in safe assets and getting some growth on them. And hence you will go for Debt Funds or even Fixed Deposits.
On the other hand, for your medium-term goals (3-5 years away) like buying a car, you can have a mix of Equity and Debt. That’s because you have a slightly longer investment horizon, and if there is some interim volatility or a fall, you can live with it. So, Hybrid Funds become the right product for you.
And on the other hand, are long-term goals for which you can pick pure equity funds and focus only on growing your money.
Consult a financial expert at Net Brokers to know about the amount of required investment and the right asset class to reach your desired goals!
5. Review & rebalance your portfolio:
Your goals might keep changing over time depending on the situation you are in. Therefore, it is important to keep reviewing your portfolio and track where you stand financially. This will not only help you plan ahead for the future but will also facilitate in improving your portfolio’s financial performance.
Key Takeaways from Net Brokers:
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Goal-based investing isn’t just a smart financial move—it’s how you give your dreams a deadline. Whether it’s building a secure retirement, sending your child to a top university, or planning that once-in-a-lifetime vacation, mutual funds can help you get there—step by step, rupee by rupee.
But here’s the thing: every goal is personal, and so should be your investment plan.
- Want to know how much you need to invest for your goals?
- Confused between equity, debt, or hybrid funds?
👉 Let our team of experienced financial professionals help you decode your dreams into actionable investment strategies.
Call us today—because the best time to start was yesterday. The next best time is now.
Download our Net Brokers mutual fund app and get access to our goal-based calculators like the child education calculator, the retirement calculator to get started with your goal-based investing.
Happy investing!