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Setting your Investment Goals
If investing is a journey, your investment goals are the destinations you hope to reach with the wealth you build over time. A comfortable retirement is the single most common investment goal, but most investors have more than one goal. It’s important to identify your goals for your financial professional and to arrange them by the time horizon you have set for achieving them, as in the table below:
| Short-Term Goals |
Mid-Term Goals |
Long-Term Goals |
|
Travel |
House Deposit |
Retirement |
|
Furniture/Appliances |
House Renovation |
Higher Education |
|
Wedding |
Start Business |
Family Legacy |
|
|
Holiday Home |
Charitable Giving |
Other goals
In fact, there are two goals that you should consider before you even start your investment plan. First, reduce or eliminate credit card debt which generates interest charges that are likely to be higher than the investment returns you hope to return in any given year. Seconly, start an emergency fund and add to it as your income rises and your responsibilities change. A good rule of thumb is to have enough money set aside to cover three months of living expenses. At mid life, when your family responsibilities are at a peak, that figure should rise to cover six months of expenses.
Goals over time
The goals you establish when you begin your investment plan are likely to change. As you realise some short-term goals, they will be replaced by others. When your family expands, with children or grandchildren, you will likely need to revisit your goals. It’s important to share any major changes in your life circumstances with your financial advisor. And it’s a good idea to review your list of goals annually, when you meet with your financial advisor to review your portfolio.
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Merrion Capital Investment Managers Limited (trading as Merrion Investment Managers) is regulated by the Central Bank of Ireland | |