How to Set Investment Goals
Investment goals are important. When correctly and effectively set, an investment goal provides a milestone as well as a reference to track progress against. With a goal in mind, you’ll always have a clear understanding as to whether or not your investment strategy is optimal.
The most skilled investors who are able to systematically and reliably grow wealth are master goal-setters. Their goals are clear, effective and realistic while being challenging. An impossible goal is useless, and an easy goal might lead to complacency.
Ideally, a great goal will provide clarity and purpose. You’ll have something to hold yourself accountable to, something to strive towards and something to give you a sense of accomplishment once complete.
Here are the best ways to make sure your investment goals are compelling, effective and useful:
How to set great investment goals
Goal-setting is a subjective exercise with everyone having their own personal preferences and ideas on how to do it, but there are some key fundamentals surrounding good goal-setting that all expert investors can agree on.
The most important thing when it comes to goals is your attitude towards them. A goal shouldn’t be a vague idea like, “I want to have more money next month than I do now.” You should have a specific amount or figure and a specific date.
That way, you can create a compelling timeline from now until your goal date and gain visibility over how you’re tracking against it. This keeps you accountable, motivated and informed.
When setting an investment goal, a great acronym / checklist for ensuring the goal ticks all the boxes is “SMART”.
The SMART format
SMART stands for specific, measurable, actionable, realistic and time-bound.
- SPECIFIC: Your goal should pertain to specific details, for example, “Earn $10,000 in profit by October 11th, 2017.”
- MEASURABLE: You should be able to measure your progress against your goal. Are you on track to reach it? Should something be adjusted early on?
- ACTIONABLE: Your goal should have a clear set of actions attached to it. You should understand what you’re going to be doing to achieve it.
- REALISTIC: Your goal should be sensible. If it’s impossible or unreasonable, it’s a useless goal.
- TIME-BOUND: Perhaps most importantly of all, your goal should have a date attached to it. This provides a sense of urgency and makes it harder to procrastinate.
So long as you’re constantly setting goals, your goals adhere to the SMART format, and you’re consistently taking measured action towards them, your investment goal-setting will provide you with clarity, direction and wealth.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If one of your goals is to buy a home or invest in property, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.