If you find investing daunting, the best approach is to start with goal-based investing. It’s a strategy that helps you focus on specific financial goals and can help you make sound financial decisions, rather than get swept up in the volatility that comes with investing.
This does not constitute advice and advice should be sought in all instances before acting on it.
Whether you’re investing as a means to save for retirement, to buy a home, or even to help pay for your child’s education, goal-based investing is a straightforward strategy with many benefits. When you invest with specific goals in mind, you’ll better understand what you need to do in order to reach those goals and it will be easier to stay on track. In fact, having a long-term goal will help you stay focused instead of letting market conditions influence decision-making.
Having specific goals helps to foster discipline, which will only benefit you in the long run. Plus, it will help you stay motivated. Sometimes you might feel like you’re so far away from hitting your goal, but reviewing your plan and ensuring you’re doing all you can to help reach your goals even when times get tough.
Increase your chance of meeting your goals with a SMART plan
There are some basic principles that can help you get started setting goals. Make sure they’re SMART — specific, measurable, attainable, relevant, and time-bound to give yourself the best chance of achieving them. Here’s a breakdown of what this means:
SPECIFIC – You need to set financial and personal goals that are as specific as possible. Otherwise, you’ll lack the direction you need to follow through. Let your goals be your compass that helps guide you. After all, if you don’t know where you’re going, how do you even begin to navigate your path? Think about what you want to achieve in life and what steps to take to help you get there.
MEASURABLE – How will you know when you’ve achieved your goal? Set goals with deadlines, specific amounts, etc. so that you have something quantifiable to measure your progress. Having something solid helps you visualise a finish line, something tangible to work toward.
ATTAINABLE – Reaching for the stars is a nice idea, but when setting goals, you should set ones that are realistic and achievable. Whatever you want to accomplish, start with your highest priority goals and ensure that you aren’t having any flights of fancy and that you can easily reach your goals in the timeframe you’ve chosen.
RELEVANT – Be sure that your goals align with the direction you want your life to take and are relevant to what you want your future to look like. This means you need to strike a balance between your desires in the present with your long-term goals in order to remain focused on making sound financial decisions.
TIME-BOUND – Sometimes your timeline will be heavily influenced by outside factors, such as retirement, but even if you have to set a deadline yourself, make sure your goals have a time constraint attached to them. It will help create urgency and something to look forward to once you finally achieve your goal.
Seek professional financial advice
Working with an independent financial adviser, like the experts at Dental & Medical Financial Services is the best way to ensure your investment strategy is the right one for you. For help setting goals and devising your very own financial plan, get in touch today.