How To Set Realistic Investment Goals

Why do you invest? Really? If you say to make a lot of money, well, how much is a lot of money? And when you get ‘a lot’ what are you going to do with it? Many lottery winners have been reported to be on the verge of bankruptcy not more than one year after winning ‘a lot’ of money. Many invest in the wrong things. The problem is not having a plan, not having proper goals.

Your investment advisor can guide you to long term wealth creation, but the operative word is guide. They are simply a resource tool to help you reach where you want to go – to help you set realistic investment goals. Lets take a look at some of the questions investors should think about when deciding how to invest their funds – with the help of their financial advisor.

Investment Policy Statement

1. What are the real risks involved, especially in the short run?

2. What are the most likely emotional responses I will have if my investment loses value?

3. How knowledgeable am I about investments and the markets in general?

4. What other capital or income sources do I have?

5. How important is this particular investment to my overall financial position?

6. What, if any, legal or regulatory restrictions affect my investment needs?

7. What, if any, unanticipated fluctuations in portfolio value might affect my overall investment goals?

When you have the answer to these questions (preferably written down and filed with your investment advisor), the next step is to identify the investments that are right for your circumstances. Constructing an investment policy statement is part of the overall portfolio management process.

Step 1:
Create Investment policy Statement
Focus: Short term needs
Long term needs
Knowledge about investing
Expectations

Step 2:
Examine current and projected financial, economical, political and social conditions that will affect investments. (Your financial advisors’ research department can help you with this.)

Step 3:
Implement the plan by constructing the portfolio by meeting your needs with the minimum risk levels.

Step 4:
Monitor and update as the investor needs and environmental conditions dictate.

Remember, financial planning is a partnership between you and your financial advisor, with the ultimate responsibility in your hands. Are you serious about setting realistic investment goals?

Invest In The Future – Teach Your Children How To Save

We all know that children are the future, so let’s teach our children how to secure their own futures by developing their saving habit.

Get Started…

Convincing children to do anything is challenging, much less convincing them to do so regularly. Developing a saving habit may be difficult for children because they may not understand why there is a need to save since their parents take care of all their needs. Here’s an approach to think about. Just as you save for big ticket items, help your children to set and achieve savings goals. You could make a deal with them for special “nice to have” purchases – for every portion they save, you will match it. That encourages saving and regularity!

Then, Find the Money to Save…

You may be thinking where do children get money to save? Well, as it turns out there are lots of sources. First, cash gifts for birthdays or special occasions can be saved in whole or in part. Second, encourage them to save some of their allowance and lunch money. Perhaps you can tie increases to their ability to demonstrate disciplined savings! Third, other than standard chores, maybe you can offer to pay them for special tasks and then encourage them to save all or part of those earnings. Think creatively, apply some discipline, and your children will easily develop the saving habit.

And Now, Decide Where to Save…

A “piggy bank” is always a good starting place because it develops the habit of putting money aside. Experts say use a clear glass jar so children can see the money “growing” with every “deposit”.

The real benefit to your children will come when they begin to understand the power of compound interest, which is what you can get from a savings account. Don’t forget also that long term saving is rewarded; therefore, it is good to start as early as possible.