‘Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor’ - Robert J. Shiller, American economist
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Money touches multiple facets of our daily lives – self, family, work, home, hobbies and beyond. 
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Each of these dimensions is connected with a set of financial goals which could range from retirement planning for self, planning for a vacation with family, buying a dream home to building future wealth through prudent investing.
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In fact, goal-setting is the starting point of every investor’s investment journey. Let’s find out about the advantages of goals while investing. 
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Investing amidst shifting goal-posts

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‍Wealth is not built in a day. Growing wealth through investing towards meeting life goals requires careful financial planning and monetary discipline. 
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Wealth creation is a gradual process that takes time, depending upon the timeframe i.e. short-term, medium-term and long-term goals and of course, the life stage of the investor. 
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Some examples of timeline-based goals are as follows:
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Each goal serves as a financial milestone towards which investors accumulate their savings or invest regularly, either as fixed amounts at periodic intervals i.e. Systematic Investment Plan (SIP) or alternatively in bulk amounts. 
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Never lose focus of your goals
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Goals-based investing means investing towards specific goals. 
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The goals vary based on multiple criteria such as age group, income levels, family size, financial condition, health profile, investment preferences, risk appetite, and so forth. 

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A Fidelity study provides a useful checklist of the questions to ask before kickstarting the investing journey:

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Goals-based investing provides a structure to financial goals and helps decide which goals to prioritise. 
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You can also build a well-balanced investment portfolio with a diverse asset mix to meet goals, measure the progress rate and periodically rebalance your investing strategy to stay on track.

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How does traditional investing stack up against goal-based investing
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Goals-based investing focuses on achieving financial milestones with the aim of accumulating a pre-defined corpus value for each goal. 
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On the other hand, traditional investing emphasizes risk-adjusted returns and asset allocation towards realising a minimum rate of return, say, for example, returns benchmarked with the index or inflation-beating ROI. 

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The following are some of the key differences between traditional investing and goals-based investing: 

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One path, multiple goals
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There is no one-size-fits-all approach when it comes to goals-based investing. This is because goals vary across investors and the investible surplus also differs greatly. 
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For example, the estimated corpus required for a 3BHK house property would vary widely from say INR 50 lakhs to INR 6 cr depending on the financial situation and preferences of every individual. 
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A whitepaper by Orion provides interesting insights on goal-based investing based on an SEI case study: 
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A world of benefits by scoring goals
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Each one of us has so many unfulfilled aspirations and things we want to achieve in the future. Be it buying a car, purchasing a home, or growing a sizeable corpus for a happy retired life. 
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Multiple targets can often leave one feeling overwhelmed and disheartened. This is where goals-based investing can provide financial clarity. 
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It can help create a timeline-based roadmap towards transforming these dreams into reality in a phased, gradual and milestone-driven manner. 
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Goals-based investing may be summarised in 4 distinct steps:
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1. Identify the financial goals i.e estimated amount of money required towards meeting each goal
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2. Set a timeline for each goal i.e. short-term, medium-term or long-term time horizon
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3. Invest regularly to grow wealth
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4. Track progress and review the asset allocation and portfolio structure based on evolving scenarios
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A Morningstar study finds that adopting a goals-based framework for financial planning resulted in a 15% jump in utility-adjusted client wealth. 
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Along with superior returns, goals-based investing has several other benefits as below:

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Invest with purpose
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Just like life needs to have a purpose, investing too should have a purpose. 
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Goals define the purpose behind investing by answering all the basic questions of the investor- why to invest, how much to invest, where to invest, what to achieve by investing and when to invest. 
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