Investment Goals

Knowing How to Set Your Investment Goals

When it comes to financial success in investing, it is essential to set a goal. Setting investing goals can contribute to your focus and plans and will help you be motivated. But first, you must consider factors such as your time, investment knowledge, how many risks you can handle, and other aspects that can affect your goals.

Why are investment goals important?

Having goals gives you certain advantages in achieving financial success, such as getting a clearer picture of what you want and creating a plan to avoid unnecessary efforts. When it comes to investing, setting goals can guide individuals in making the process easier.

By setting an investment goal, you can identify your path to achieve it. Also, it includes how you will do it, when, where you will invest your finances, and how much time you need to achieve it.

Experts recommend a format or mnemonic device in having an investment goal. It is referred to as SMART Goals. It stands for:

Specific- Setting a specific goal in investing requires deciding how much you plan on saving and the primary purpose for which you want to save it.

Measurable- Usually, these are easy to measure since there is an exact dollar amount connected to them, making it clear to see the proximity in reaching the goal.

Achievable- It is okay to set lofty goals. However, having unachievable goals can make you unmotivated and steer resources away from other attainable goals.

Relevant- To consider an investment goal good, you should be able to align to your broader goals and values. Moreover, it would be best to determine whether your goals connect to your life and are realistic.

Time-based- If you have an end date to your goal, it creates a sense of urgency and can help you calculate the amount to be saved weekly or monthly to be closer to your investment goal. Therefore, it is crucial to assign a timeframe to it to track your progress.

Setting realistic investment goals

Discussing how essential it is to set investment goals is easy enough. On the other hand, taking the necessary steps to achieve them is a whole different story. Here is a guide on how to set achievable and realistic investment goals:

Know what you want to achieve

Identify what kind of goal you want to reach in the future. Common investing goals include retirement, your child’s college education, the car you plan to purchase, or your dream house. Determining your goal and having it according to the SMART format will make creating an investment plan for achieving it easier.

Consider your time horizon

After deciding how to invest the savings for your goal, you need to assess your planning horizon.

For short-term goals achievable in under three years, the most suitable path for them may be liquid investment such as cash, treasury bills, and accounts in the money market.

Regarding mid-term goals ranging from three to ten years away, try balancing a portfolio in high-quality and fixed-income investments and stocks.

Lastly, for long-term goals that are reachable over ten years away, you can have a sharper approach, like investing in stocks, mutual funds, and exchange-traded-finds (ETFs).

Take baby steps

According to experts, individuals will be more comfortable trading if they do it with just small amounts of money. Basic adjustments can make their goals seem more achievable. To better understand the process, it is highly recommended to start small.

Gather support

Looking for financial advice and support in reaching your goals is now easier. Due to social media’s increasing popularity, countless pages share in-depth financial advice regarding investing and other topics about money. In addition, many investing platforms offer educational resources on their websites to guide investors to start.

There are four main objectives in investing goals. These are:


People want their money to grow, so they turn to investing. In addition, they wish to make it larger in value over the effects of inflation to have greater purchasing power in the future. Besides, this is already obvious as an investment goal. Moreover, it is likely to be objective if an investor has a long-term time horizon. However, since markets keep shifting randomly, people with short-term time horizons focus on other priorities rather than putting a large sum of money at risk.


Besides growing individuals’ money, people who are close to or in retirement focus on preserving their wealth. It is as vital as growth depending on factors such as speculated time to retirement, overall net worth, and your mindset about money. It makes you more comfortable if you can assure yourself that you have a certain amount locked in.

Cash flow

This is the structuring of any effective financial plan. The higher the cash flow, the more remarkable your ability to save, invest, and pay your debt. You can improve your cash flow by having a side gig, investing in high-dividend-yielding stocks, or putting aside more cash available for you to finance other goals. More cash available means greater flexibility, adaptability, and psychological assurance.

The importance of tracking your progress

Your work continues beyond setting your investment goals and building your portfolio. Therefore, it is vital to measure your progress to ensure you are walking the correct path.

Using technology to your advantage, it would be easier to track and measure progress if you utilize an application or online financial planning tool, as suggested by professionals. These tools can input current assets, the amount you have been saving, and the dollar amount of financial goals you plan on achieving. Also, they will be able to generate some score graphs so you will know if you are on track.

While measuring your progress towards your goal, be prepared in adjusting your strategy if you see it being ineffective. In many cases, you may need to alter your investment strategy or increase the amount of money you are setting aside each month.

Remember to take note to not check in too much in what you are investing. It is easy to panic seeing the numbers go down since the stock market fluctuates often. By checking too much on your investments, it can lead to unnecessary anxiety, causing emotion-driven decisions in your portfolio.

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