First-time investor path · Lesson 3 of 7 · 8 min
Name the goal, set the horizon, pick the vehicle
You don't pick investments — you pick goals, and the goal's deadline picks the investment.
Every rupee should be working for a named job
'I want to grow my money' is not an investment goal. 'My daughter's engineering entrance fees, due June 2036, will cost about ₹20 lakh in today's prices' is. A named goal gives you three things at once: the amount, the deadline, and — from the deadline — the asset class.
The horizon rule (a planning heuristic, not a regulation): money needed within 3 years belongs in deposits and debt, where the balance cannot lurch. Money needed 7+ years out can carry equity, because history rewards patience there — but nothing guarantees it. The 3–7 year band is a blend.
The step most beginners skip is inflation-adjusting the goal. A degree that costs ₹20 lakh today will not cost ₹20 lakh in ten years, and saving towards the wrong number feels like progress while guaranteeing a shortfall.
Price a goal in future rupees, then solve for the SIP
Goal: ₹20,00,000 (today's cost) for education, due in 10 years. Assumptions: 8% p.a. education inflation (education costs commonly rise faster than headline CPI), 12% p.a. assumed equity-fund return.
Inflate the goal to its future cost
₹20,00,000 × 1.08¹⁰ = ₹20,00,000 × 2.1589 = ₹43,17,850
Monthly rate for a 12% assumed return
12% ÷ 12 = 1% per month (r = 0.01)
SIP needed for ₹43.18L in 120 months
SIP = ₹43,17,850 × 0.01 ÷ ((1.01¹²⁰ − 1) × 1.01) ≈ ₹18,584
Sanity check
₹18,584 × 120 months = ₹22.3L invested; compounding supplies the rest
A ₹20 lakh goal today is a ₹43.18 lakh goal in ten years. Funded in equity at an assumed 12%, it takes about ₹18,584 a month — not the ₹8,600 a month a naive, uninflated calculation would suggest.
Solve your own goal
Set the goal's cost today, its deadline, the inflation you assume and the return you're underwriting — see the future cost and the monthly SIP.
Monthly SIP needed
₹18.6k
Goal cost by then (inflated)
₹43.18 L
Price the goal in future rupees first, then solve for the SIP. Longer horizons do more of the work than bigger cheques.
Figures are labelled assumptions for teaching, not forecasts — see the sources note at the end of this lesson.
Misconception check
A wedding is 2 years away. Your brother says: 'Put the wedding money in equity funds — highest returns.' What's wrong?
Ends in a tool
Plan the full goal in the Goal SIP calculator
Enter any goal — house, degree, wedding — and get the inflated target, the SIP needed and the shortfall if you start later.
Plan the full goal in the Goal SIP calculatorWhere the numbers come from
- Assumption: 8% p.a. education inflation
- Assumption: 12% p.a. long-run equity-fund return (not guaranteed; see Lesson 4)
No live prices or NAVs are used anywhere in this path. Lesson 3 of 7, First-time investor path.
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