Investment Goals: Questions & Examples

Instructor: LeRon Haire

LeRon Haire is an education professional with over 5 years experience in higher education within the University System of Georgia. Haire has received an MBA with a marketing undergraduate concentration and has the Georgia Assessments for the Certification of Educators, certified in Business Management.

During this lesson, we will address many issues regarding investment goals including what questions to ask yourself to ensure that you meet your investment goals.

Preparing for rainy days will help you reach your investment goals.

Saving For a Rainy Day

Have you ever heard the expression ''save your pennies for a rainy day?'' Whether you have or you haven't, this is a great starting point to begin talking about setting your own personal investment goals. An investment goal can be defined as a financial objective that is set by an individual and typically is set to mature at a future time. One of the primary questions held by people trying to set investment goals is how do I begin? Let's take a look at the questions that you should ask yourself when determining your own personal investment goals.

Ask Yourself These Questions

Let's assume that you are wanting to save and invest for a trip next year to Hawaii. Well, you can begin by asking yourself the following questions to ensure that you address the important topics to properly meet your investment goals.

  • How much money is needed to make your investment goal a reality?

This question is perhaps the most important because it will help you determine an estimated amount that is needed to be saved. For example, let's say that after much research, you determine that it will take approximately $1,000 for you to go to Hawaii in a year and have enough spending money while you are there. Without this step, it would be virtually impossible to determine how to move forward from this point and set forth an investment plan to reach this goal.

  • How much money needs to be placed aside to reach my goal in the allotted time?

Since it has been determined that you will need $1,000, we can now determine how much, on average, needs to be saved to make this a reality. Let's assume that you are wanting to leave for Hawaii in exactly 14 months from this current month, and you are aiming to have the trip paid off in 12 months.

If we divide 12 (months we want trip paid by) by $1,000 (amount of the trip), we have a total of $83.33, which is the total to be saved each month for the next 12 months in order to ensure that you are saving enough for the trip.

  • Is my investment goal a realistic one?

For this example, the question is can we realistically save $83.33 a month for 12 months in order to ensure that the Hawaii trip takes place? This depends on several variables, such as how much you earn and spend per month. If you have determined that this amount is a realistic one that can be reached, then you have your investment goals in place and on par to be met. The next step is to determine just how you will save for this amount (which is the next question).

  • How will I go about saving the allotted money per month?

The next question is how are you going to save this amount. Some people may choose to simply take the full $83.33 amount out of one paycheck while others may choose to take out half the amount at two different times. The answer to some of these questions will depend on variables like how often you get paid per month.

A Plan Of Action

Once these questions have been asked and answered, it's imperative that individuals prepare a plan of action to ensure that their investment goals are met. This plan of action should begin with writing down a list of your investment goals. The significance of this step lies with listing the investment goals on paper (or electronically) after each question is posed. By following this procedure, you will be able to carefully pay attention to each individual question, which will allow for greater results for meeting investment goals.

It is probably a wise decision to avoid the traps of investing.

Possible Traps of Investing

As with anything, there can also be pitfalls when trying to invest. Here are a few things that can be a hindrance to meeting your investment goals.

  • Properly evaluating risks

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