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Setting Investment Goals

To help get where you want to be financially, it’s important to set goals. And no matter what phase of life you’re in, taking a methodical approach can help make this process a little less daunting. The first step is to determine your financial needs.

Financial needs

Financial needs are very different from financial goals. A need is something you should look at as a regular expense. These most likely include:

  • Food
  • Clothing
  • Transportation
  • Rent or mortgage payment
  • Insurance
  • Building emergency savings

Financial goals

A financial goal is something you plan for, and often can be driven by your financial needs. Some examples include:

  • Getting out of debt
  • Paying for college
  • Saving enough to buy a home
  • A comfortable retirement

With smart planning, you can help increase the odds of achieving your financial goals. You’ll want to estimate the amount of time it will take to reach them. You may find it easy enough to save for financial needs and short-term goals, but longer-term goals often require discipline and planning.

Setting and then prioritizing your goals can start you on your way. Be especially careful to discuss plans with your spouse or partner to learn where you have (or don’t have) a shared vision. And think about when you’ll need the money. Are you better off saving in a taxable or a tax-advantaged account?

As you set your goals, be realistic. Don’t plan on achieving unrealistic returns, as markets fluctuate and past performance is not a guarantee of future results. Track your progress. Start with milestones you can achieve and then challenge yourself to do better.

Take advantage of bonuses, raises, or other windfalls to move you further along and monitor your progress at regular intervals. Remember, you’re not only tracking the performance of your individual investments, you need to keep a steady eye on progress toward that goal.


Life events

If you’re planning on making a large purchase in the next 5 – 15 years, such as putting a down payment on a home or paying for a college education, you may want to consider investments. Please be aware, however, that while investing might offer the potential for higher returns and longer-term growth, it involves higher risk, and it is possible to lose the principal invested.


Long-term goals

Goals on your longest time horizon, such as retirement, require more specific planning. When you’re starting your planning process, it will be important to discuss your specific goals, time horizon, and tolerance for risk with your Financial Advisor to enable him or her to present suitable investment alternatives.

Learn the basic investing types

When it comes to investing, you have many options. Before deciding which investment vehicles are suitable for you, it’ll help if you know what they are, how they work, and why they may be a good fit for your needs.

Learn about investing types

 Invest or save? 

Your goals might be more appropriate for saving.

Read When to Invest and When to Save

Emergency savings

A general rule is to set aside 6 months of living expenses to cover your everyday essentials before you consider investing for the long term