Financial Goals to Consider

Start by setting some financial goals for your future. Educate Yourself About Money. Gaining knowledge is the best decision you can make and you need to save for the future. If you’ve never thought much about this, here are good financial goals for this year.

Be specific and realistic. Identify your financial goals. Your goals should also be realistic and based on your current financial situation. Prioritize each of your personal financial goals in order of importance, and then determine how long you have to save. Figure out how much you’ll need to save per month to achieve your financial goals.

Determining what your short-term, IMG_1496mid-term, and long-term personal financial goals are is the first step.

Short-term goals. Think of your goals as the foundation for your financial plan. Each financial goal should have a time horizon and can be a stepping stone for a future goal. Short-term goals differ from long-term goals usually in the sense of timing. Short-term goals are generally smaller in scope and cash amount with a definite target date for accomplishing them.

Short-term goal example:

  • Assess your finances and eliminate credit card debt. Get Out of Debt completely.
  • Set up a rainy day or emergency fund. It’s generally a good idea to establish a rainy day fund before you invest for any other goal. Advisors recommend that people set aside three months worth of everyday expenses into such a fund.
  • Adjust your spending habits. Reduce spending on things that are more luxury-type items and “wants” as opposed to “needs”. I tried the formula ( income – savings = expenses ) I started to apply this formula just last year 2016 after hearing it from Francisco Colayco – the Chairman of the Colayco Foundation. He shared some savings and investment tips on pesobility reality tv show.Get started today! Find an investment advisor in your area or ask for help in setting up your financial plan. Experienced investment advisors will not only help you identify your goals and assess your financial situation, they will also pick investments that are best suited for your goals.

Establish mid-term goals  it may take from two months to three years to achieve. How Can You Plan for Them? Planning for intermediate financial goals is important. Another approach is to save for all of your goals at the same time. Open a specific saving account for each goal and divide the money you have available to put away between the accounts. Taking care of your money for medium term goals is tricky. You keep your emergency fund some place safe since it’s possible you’ll need it tomorrow. Since the timeline for your mid-term goals is shorter than your timeline for retirement, you’ll want to manage your risk carefully. You’ll need to strike an effective balance between protecting the savings you’ve worked so hard to accumulate while getting a bit of growth and offsetting inflation. Start saving for your mid-term goals so you can create the life you want without worrying about how you’ll pay for it.

Mid-Term Goal Example:

  • Build Your Wish List. What do you want your life to look like in the next three to five years or ten years.
  • Fund Liquid Investments. Once you figure out how much money you’re going to set aside, it’s time to figure out where to store it, so that you can keep it liquid while letting it grow. As for me, For example, shares of stock, bonds, money market funds and mutual funds are considered liquid assets. These assets can be converted to cash in a short period of time in the event a financial emergency arises.

Set Your Long-Term Goals. Long-term goals require time and planning. Long-term financial goal for most people is saving enough money to retire, own a business or for investment. They are not something you can do this week or even this year. What are your long-term financial goals? Create a picture of where you want to be in life 10 years from now. For goals with a bit longer timeline, you can consider conservative investments structured to preserve your savings in a taxable investment account.

Long-term goal example:

  • Set up automatic investments to your retirement plans and investment portfolio. The budget you created when you started on your short-term financial goals will give you an idea of how much you need. Increase your retirement savings. You may need to plan for higher healtcare expenses in retirement, include Social Security, retirement plans and pensions. This will leave you with the amount that needs to be funded by your investment portfolioLong-term goals can be achieved by being a disciplined saver and investor.
  • Try not to be emotional about your investments and don’t jump in and out of your holdings when the market is volatile.
  • Monitor your investments and risk regularly, and make adjustments to your portfolio when needed.
  • Consider the time value of money.The economic principal that a dollar received today has greater value than a dollar received in the future.  Fundamental principals for these reasons: 1. More is better than less. 2. Sooner is better than later.
  • Find the right savings product for you. You can get information about investment products directly from many banks, life assurance companies and investment firms.

When you compare investment products, you should consider two key factors:

  • Risks involved – most investments do not give you a capital guarantee.
  • The likely return – risk and return go hand in hand, so as a general rule the lower the risk the lower the rate of return you should expect.With longer-term and higher-risk products, you can expect higher returns, but this is not guaranteed and you could lose some or all of your money. You need to consider carefully the effect of this on your financial situation.

Before investing you must understand the product. How is the investment product growing and how will it continue to grow? Know the deal.Look at the valuation relative to comparable companies based on multiple factors, including revenue, net income, growth rate, risk profile and capital structure. Good companies are not always good investments—especially if the valuation is too high. As Warren Buffett once said, “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”Ultimately, any investor needs to obtain as much information as possible about the business, the industry and the deal.

Need help determining your long-term financial goals? Ask an Advisor! There are no sure bets, but the more you know, the better your odds of success.

Useful Resources


Financial Engines

 Money Management International





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