CREATE INVESTMENT GOALS
WHAT DO YOU WANT?
The first thing you need to consider is why you are investing – Create Investment Goals.
What do you want to achieve? Investing without a specific purpose will result in random investments that do not deliver what you need.
Think of it like going shopping without making a list or planning. You are likely to make plenty of purchases but perhaps not what you really needed. You will probably waste money on impulse purchases. The same principle applies to investing. You need to work out what you want from your investments before you can look into what you need. Think about what you want or what you need and turn that into specific goals.
A deposit for a home
Paying your mortgage off
Additional income for retirement
Reduced working hours
The list goes on.. but your goals must be personal to you.
Once you know what it is you are trying to achieve you can calculate how much money you need to achieve it.
WHEN DO YOU WANT IT?
Next you need to consider the time-frame in which you want to achieve your investment goals:
IMMEDIATE TERM: 0 – 2 years
SHORT TERM: 2 – 5 years
MEDIUM TERM: 5-10 years
LONG TERM: 10+ years
Try to be realistic! The more you want in a shorter period of time the more risk you have to take and the less likely you are to achieve your goal.
WRITE DOWN YOUR GOALS
Research shows that you are far more likely to achieve any goal if you write it down and keep it visible. So make a note of your investment goals and keep it someone you will see it from time to time. This will keep you focused on the end result and stop you from randomly investing. You can also use it to check that what you are doing is aligned to your end goal.
EXAMPLE: MY GOALS
As an example I have two main investment goals I want to achieve which I am happy to share. I have kept some of the specific details private and I would suggest you keep these details private too.
GOAL 1: INCOME
GOAL: Create a income stream that allows me to reduce my work hours and spend more time with family and doing other things I enjoy.
AMOUNT REQUIRED: £x,000 per month
TIME FRAME: By 2026 when I am xx years old
GOAL 2: ABILITY TO SUPPORT KIDS
GOAL: To have enough money to help my kids with university and home purchases.
AMOUNT REQUIRED: Around £xxx,000
TIME REQUIRED: By 2029 through to around 2035 (Not a one off situation or static date)