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When it comes to managing your finances and wealth, a lot of people have the best intentions but aren’t sure how to go about it in the best way. Putting money aside in savings and building wealth through investments is always a good idea — but often the most effective way is to do so in a goal-based manner. This means saving for a tangible goal instead of just trying to beat the market. Here are some common investment objectives to consider.
These days, people retire at all ages and for many different reasons. But regardless of when you plan to stop working full-time, you will want to have money set aside to help ensure you have a good quality of life after you have to rely on a fixed income stream. Many people plan this based around their current income and the amount of years they plan to spend in retirement. It’s helpful to work with a financial advisor to lay out your options and find investments that match your risk level.
If you are currently renting or planning to purchase a new home in the future, another great investment goal is saving for a house. This is a more quantifiable goal because you can look at the current prices for houses in the area you want to live and plan your goals based on the fixed amount that you will need for a down payment and mortgage payments or to purchase the house in full.
If you are planning to earn a degree or to send your kids to college or grad school, you can also invest in order to save for education. It’s good to get a sense of what types of schools you are interested in, what the cost is per year or semester and how long you are planning to stay in school to get a big picture of how much it will total. Then you can begin investing in order to set the money aside for this cost, which can be a considerable amount.
Having specific goals in mind when you start investing is the best way to end up where you want to be financially. It’s smart to make goals that you can then work toward meeting in your investments.