And the earlier one starts planning and investing, better it is for the longer run.

Mutual funds can play a very important role in planning to meet such financial goals, along with adequate insurance cover, and also some other investment products, financial planners and advisers say. For example, as one takes up a job and starts earning, one should start investing regularly even if the amount is small. At pres ent there are mutual fund houses which accept monthly investments of just Rs 500 through the systematic invest ment route, popularly called SIP. According to financial planners and advisers, one could start with a small amount and as and when the person's income rises, he should also increase the investment amount. If one starts investing as he starts earning, that money could also be used when he gets married.

Here the important thing to note is that one should not keep his savings idle in bank accounts returns from which does not even meet the rate of inflation. This is important because if one keeps money parked in a financial product returns from which do not beat the rate of inflation, actually he is earning negative real return, which should be avoided.

The next stage in one's life, after he settles down with a stable job or has a stable income, is to start a family. During this phase, it is important to take insurance covers for life so that the people dependent on him could remain safe in case of any eventuality for the person. Also given the rising medical costs, it is also absolutely necessary to adequate health cover for the whole family.

The next phase, when one has a child, is to plan for the child's education and then marriage. Here too mutual funds could be very useful.According to Arun Mandal, co-founder, Box Personal Financial Advisors, Noida, apart from all one's other life goals, mutual funds can also help build the desired corpus for one's child's higher educa tion and marriage using a combination of lumps-sum and SIP in equity, debt and gold funds. The same strategy can also enable you to build a retirement corpus so that you can celebrate your sunset years\.

To build one's retirement corpus, according to Mandal, SIP in mutual funds could be very useful. Since the amount, frequency and dates are pre-decided, it leads to the habit of `saving first and spending later'.SIPs give best results when continued for long peri ods irrespective of market cycles. The inherent benefit that accrues is safeguarding your invest ment portfolio against its biggest enemy ­ your emotions. You will continue to benefit from the time spent in the market rather than trying to time in the market. Historical longterm SIP returns in almost all the equity funds in India have been stellar

Even after retirement, one could use various mutual fund products for a tensionfree life. Once one builds an adequate corpus for retirement, as one nears retirement, the funds should be slowly moved to debt funds which witness relatively lower volatility. After retirement, financial planners and advisers usually advise their clients to move the money into accrual debt funds and set up a systematic withdrawal plan (SWP) from such funds so that every month only the returns generated from those funds are taken out while the principal amount remains as it is. This is also a very tax efficient method of earning good and steady returns after retirement.

Other than meeting the bigger and long term goals in life, mutual funds could also be used to meet short and medium term goals. For example one could use an SIP in liquid funds or short term debt funds to meet early outgo of funds like paying the annual school fees, insurance premium payments, expenses for holidays and vacations etc. However, financial planners and advisers warn that to meet the short and medium term goals, one should not use equity mutual funds, but should look at debt funds.