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Optimize Your Goal Investment Amount

Goal-based Investing
12 Comments

All of us have dreams and goals. Unfortunately for most of us the total monthly investment required to achieve these goals is a little too much. The reasons for there are many: we don’t earn enough, we spend a lot, we have a lot of outstanding debt etc. etc.

Read this article by Sanjay Dixit who works is a financial planner at Horus Financials

How a Financial Planner can add value through savings optimization?

This talks about how one can reduce the monthly investment by 20-40% and still achieve all goals. Thanks to Mr. Centhil R. Iyer, Horus Financials for pointing me to this article.

So I made an excel calculator to automate this process for 5 goals in addition to retirement. It also has the Retirement planner Lite and general goal planner built into it.

Go ahead give it a try and let me know what you think.

Download the Goal-investment-Optimizer

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Updated: August 30, 2016 — 6:54 pm

12 Comments

  1. vandhana

    Great tool. Can we have an enhancement to include both spuses salaries with different growth rates, different years to retirment etc and common set of goals? Because the wife may retire earlier when there is a family to take care of !

    1. pattu

      Thanks. Yes this is a good idea. I was suggested this earlier. Was just too lazy to incorporate. Also I was worried if it will make it too complex.
      Easy enough to put this together. Just got to fight my inertia.

  2. Krishna

    Hi Pattu,

    I used your goal optimizer.. but retirement part shows huge figure I need o invest 90% of my money towards it.. which I cannot .. it rather scares me..

    Regards,
    Krishn

    1. pattu

      Retirement corpuses are always huge. Try my integrated financial planner
      http://freefincal.com/excel-financial-planning-template-creating-financial-plan/

      That might help give a better idea. Just invest as much as you can.

  3. Krishna

    Hi ,

    I used the same template… it gives a whopping figure of 38k to be invested per month to achieve the required retirement corpus .. if i take the net rate of interest pre-retirement (post tax) as 12%

    Dont know whether I am right or wrong

    1. pattu

      I am not surprised. Typically you will need to invest each month 80-100% of your monthly expenses.

  4. Krishna

    So can we assume 12% .. is that right ?.( Pray God that we get that much for return 🙂

    1. pattu

      I would not assume more than 10%. Please also see my latest post, published just now.

  5. Kuldeep Randhawa

    I have just read the TIP investment plan on ICICI Direct. Where they claim to higher possibility to achieve the target amount.
    Sir Please can you make a calculator based to TIP strategy , and please also upload the Back testing report of TIP investment based on the Index fund NAV or NIFTY.

    1. pattu

      This is similar to the VIP mode of investing. See:
      http://freefincal.com/comparing-sip-vip-investment-strategies-with-sensex-monthly-returns/
      http://freefincal.com/revisiting-the-sip-vs-vip-debate-with-fundsindias-report-on-vip-investing/
      http://freefincal.com/vip-vs-sip-with-sensex-returns/

      1. Kuldeep Randhawa

        I think after reading all above given links, this is true that SIP works best.
        According to me VIP model works best of we start it when market is at its median PE , (Say around PE of 18 ) . In this way we invest more by just adding premier to regular SIP. and invest less when PE ahead to more than 18.

        I have made a self designed worksheet in Excel , where I check the PE is greater or less than the Median PE, If PE is less than median PE then a SIP + ( Median PE – Current PE * 1000) amount is invested.

        and IF PE goes more than 18.7 ( Nifty 10 year Median PE) then SIP is started to subtracting. and almost SIP amount become 0 when PE nearing to 24.
        since last mid of 2011 , I am following this method and it has given me better result than regular SIP. because number of time in these three years market went down than median PE.

        Please sir comment on this strategy.

        1. pattu

          There are many ways to this and we cant search for the best method. If you are comfortable with it, go ahead. I would personally prefer running a constant SIP and investing additional amts on market dips. I dont care if this is good or not. Just that I am comfortable with it.

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