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Do you know your financial goals?

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@edystringz
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For many, this question may sound obvious. But it is important to take some time and put in the hard effort to ensure that your goals are clear, concrete, and measurable enough. Source Your investment plan should be aligned with your personal financial goals so that you can enjoy the benefits of achieving your long-term targets such as saving up for a significant purchase or building funds for retirement. This way you will have fewer surprises and more stability when it comes to financial concerns.

You should be able to answer the following questions:

• What is my goal?

• How much do I want per year or month?

• What percentage of my income do these investments represent?

• Do I want a guaranteed or variable investment (i.e.: bonds)?

Having good financial knowledge and establishing your financial goals will help you make better-investing decisions.

Consider the time horizon

The time horizon is how long you plan to have your money invested. There are four main time horizons for investing: short-term (less than five years), mid-term (five to ten years), long-term (10+ years), and forever. The duration of each stage will define the level of risk you should take, which will in turn affect your potential returns.

Short term – Investing in the short term is a good idea if you have a short time horizon and need to increase your cash flow quickly.

Mid-term– It is advisable to invest in the mid-term if you are planning to take some time away from the markets or want more control over how you invest.

Long-term – If your money is going to be invested for many years, it makes sense to put your money into stocks that can potentially provide a better long-term return than bonds.

Forever – Investing forever means that the principal that you invested is never touched and is passed on to your heirs.

Be prepared for changes

No one is wise enough to predict the future. This can be proved by the scenes from this stock market crash. And this uncertainty is not going away anytime soon.

So we need to prepare for changes and emphasize flexibility in strategies, in case of unforeseen circumstances. We need to have a comprehensive plan and be able to readjust appropriately.

Having a grab-bag of assets can help combat market risk rather than depending on just one type or one sector. Having at least some assets that escalate when stocks go down will benefit you in bad times while they will also protect you during inflationary times as well.

Your Financial goals are important

Whether we’re talking about stocks and shares, property, or any other type of asset, goals are the foundation of successful investing. You will have fewer surprises if you invest according to your goals. Aligning what you want from your long-term investments with the returns you should try to earn. This means finding the right types of investments that fit the goals that you want to achieve.

Of course, there are plenty to choose from – both short and long-term, equity or debt, and all manner in between. What matters is matching your spending needs and desires with what can be realistically expected so your money doesn’t disappear in a volatile market!

Financial goals vary from saving for the purchase of a home, retirement, and getting started on an estate plan. You should first be crystal clear about what your financial goals actually are to be able to identify which investments suit your needs better.

Conclusion

People often don't take the time to set goals for themselves. Saving for an eventual goal, like retirement, six months from now is too far out to effectively motivate people. Setting shorter, immediate targets can help people know their commitments and when investing for the future might be crucial.

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