Setting Financial Goals

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Financial Goals

If you don’t know where you are going, you might wind up someplace else. – Yogi Berra.

This important quote can be applied to almost every aspect of life including investing. A key to earning fruitful returns on investments is having a defined end game and setting financial goals. Ask yourself, what are my goals? What do I wish to achieve in approximately five or ten years?

A new approach to managing wealth is goal-based investing, which emphasizes investing with the objective of reaching specific life goals instead of comparing returns to a benchmark. Individuals use different milestones in their lives to set the precedence for investments goals. For instance, whenever investors may have children they tend to start funds that aid preparing for college tuitions, or saving towards the purchase of a home. These goals will influence the time proximity as well as the level of aggressiveness necessary to achieve the end game. Successful investments involve defining measurable and attainable goals. These include applying a dollar amount to whatever an individual hopes to attain, as well as a time horizon in which they hope to accomplish such.

Investing is just like building a house. There is no way the house can look the way you want it to without a well thought out design and detailed blueprints. Without financial goals, an individual may not end up where they want to be, or have adverse results because of lack of planning. Important to note; it is not just about having an end game, even though it is highly necessary, but one will also need to set objectives to meet end goals. Many people who need assistance in setting objectives to meet personal goals will seek the aid of a financial advisor which is wise especially if one is ignorant about or is new to investing. These individuals are qualified to give guidance on how exactly one can achieve financial success, as well as grant smart advice on the steps to getting there. They can assist by laying out different options and help to find investments that match your risk tolerance that will be appropriate for and in line with the goal. Just like the goal itself, these objectives must be measurable and attainable within the set time span. Achieving financial success is a process and must be treated as such. It is never too early to start saving for milestones that seem to be far away. Students entering the working world need to be educated on the importance of retirement funds and setting aside funds for (possible) future dependents.

Investing doesn’t only involve daily trade requests you may send to your brokerage house, but also, it is about the goal you wish to achieve.


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