First, Know your present value. Quite simply, count your money. The bank balance, investments in fixed deposits, post-office savings, gold, stocks or mutual funds, provident fund balance, and so on, from part of the wealth.

Taking stock of your investments provides clarity on where you stand and how much further you need to go. Do not forget to deduct debt obligations while calculating your assets.

Next, find out what assets you need to invest in to meet each goal, be it equity, debt, or gold. This will depend, to a large extent, on your appetite, that is, the kind of risk you can take. .

Are you content with singles and twos and an occasional boundary, or one looking to convert every ball into a sixer ? .

Your risk appetite, however, cannot be the only factor that determines your choice of the asset class. The nature and time horizon of goals are also pertinent. .

For instance, if you have a short-term goal, such as buying a car, you need to consider safer investment avenues. For long –term goals, such as retirement planning, investing in relatively high-risk assets will not hurt. .

In other words, feed your risk appetite, but only after making sure you can take a hit. Your return expectations would depend on the risks you are willing to take.

Then, Calculate how much you would need to invest to achieve your goal. You don’t have to be an expert. Just google your way to ‘financial calculators’ and plug in your numbers assuming a realistic return and determine what you need to save. But remember to consider the effects of inflation. .

For example, what Rs 100 can purchase in future will be not less than what it can get you now. If you miss out on this one factor, your meticulous plan can go awry! The financial calculator could throw up a heavy sum. Wondering if this would call for giving up the occasional treats you pampered yourself with? .

Not necessarily. Just budget for it. That leather jacket you have your eye on can still be bought, provided you choose the restaurant next door over the star hotel for the Sunday evening outing. Essentially, you will have to make tradeoffs. .

Try to sneak in your one-off expenses in between, but strictly no dipping into the money earmarked for investment. While budgeting, do not forget to set an emergency fund for unexpected medical bill or travel. .

Also, your savings come only after you meet your regular bills such as house rent and the kirana shop. .

And to think all along that savings for most of us meant the surplus left over after spending for the month. .

As a young investor, it must ideally be the other way round for you. If you are serious about meeting your financial goal, the amount left after putting away for investments, must be the money to indulge yourself with. .

However, if the amount you are required to invest is still high despite all this rationing, you may have to re-visit the time horizon for your goal. .

So count your money, determine your investment vehicles and calculate the sum required to achieve your goals. Participate. It’s more fun that being a silent spectator.