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How To Define Your Investment Goals

Investing comes in all shapes and sizes. You likely have goals in your life that will require planning. Retirement, housing, and emergencies or a rainy day fund are likely somewhere on your list. Each person’s investments are unique for what they are looking to achieve, and it’s important to look at the road ahead to accomplish your investment goals.

No matter what your goals may be, it will be hard to make that dream a reality without clearly defining your goals, writing them down, and proactively taking steps to reach them.

How Much Should You Save?

If you are looking for a simple answer, there is not one. There is not a one-size-fits-all number for every individual because savings and goals are personal. However, if you are looking for a “popular” place to start a good rule of thumb to allocate at least 20% of your gross income to savings. But remember, depending upon your individual investment goals, you might need to save more than that to reach your targets.

What Are Your Short Term Goals?

Common short-term goals typically include savings for emergencies, down payments for cars and homes, home improvement, vacations, weddings, and beyond. Your short-term goals will continue to change throughout the course of your life, and saving for them can be quick, or take up to ten years.

The first thing you’ll want to start with is making sure you have a rainy-day fund. Most people try to have at least 6 months’ worth of income saved in this type of emergency fund.

Beyond naming your short-term goals, you are probably wondering where to invest your money for them. With these goals, you want to look at short-term investments. This type of investment tends to be stored in a place where you can easily access the money if you need it, without a penalty.

Some of the best places to invest your short-term savings include savings accounts, CD’s (certificate of deposit), short-term bonds, or even peer to peer loans. However, these each come with varying levels of risk for the potential return. Make sure you’re comfortable with the risk for each option before investing.

What Are Your Long Term Goals?

Long-term investing goals are most commonly used for retirement. You should consider what it will take to ensure your annual expenses for living, healthcare travel, and the like are covered. When you’re planning for these long-term goals, consider how much money you will need for your desired lifestyle.

You’ll also need to consider the age you’re looking to retire. If you are young and would love to retire early, you’ll need to save more to make sure you are comfortable for the remainder of your life.

With long-term investing goals, you can consider options that are higher risk and not as liquid. Consider stocks, equity exchange-traded funds, bonds, and retirement accounts like Roth IRAs and 401(k)s.

How To Manage Investment Goals By Time Frame

As you make your way through your life, your investment strategy should change.

Investing In Your 20s

When you are in your 20s, you should consider saving for the unexpected. This is the time you should set up your emergency fund and start working to eliminate or resolve debt. Your 20s is also a great time to invest in aggressive, or higher risk options while you have less to lose.

Investing In Your 30s

Once you hit your 30s, you should ensure that you are budgeting carefully. Stick to your plan and your budget and start prioritizing your retirement savings if you haven’t done so already. Maximize your contributions to your 401(k) account and consider other retirement savings accounts like Roth IRAs.

Investing In Your 40s

During your 40s, you should focus on eliminating any debt you’ve acquired. Paying down or off your home loans, paying for your kids’ college funds, and bulking up your retirement accounts should be your priority.

Investing In Your 50s

Investing in your 50s should be centered on your retirement. Now is the time to make catch-up contributions to your retirement plans and continue watching your portfolio assets to make adjustments as needed.

Investing In Your 60s

Once you reach your 60s, your retirement planning is likely your main goal. You’re close to retirement, if you haven’t done so already, and now you should focus on sustaining your wealth. This is the time to start shifting your portfolio to more conservative, stable investments.

Investment Objectives For Married Couples

When you are married, open communication should be at the forefront of your relationship. And investment objectives for the two of you should be communicated clearly with each other. It doesn’t matter at what age you got married, you invested in a life with your partner, so you should consider your investment goals together as a couple.

Talk About Your Goals

Previously you were likely investing as a single person, or perhaps as the head of your household. Now, it’s time to sit down and discuss your short and long term investment goals together. You might not see eye to eye, and studies have shown that money is the main issue married couples argue about. Sitting down with your spouse and finding a strategy for getting out of debt, retirement savings, and short-term investments can help set you on the right financial path.

Update Your Beneficiaries

Now that you’re married, you should revisit your existing beneficiaries on all your financial accounts, including your retirement accounts. Some retirement plans from employers automatically name your spouse as your beneficiary, unless you name someone else and your spouse signs in agreement.

Make Sure Your Loved Ones Have Life Insurance

You are likely wondering what life insurance has to do with investing. And it might surprise you that the answer is a lot. If you have a loved one that depends on your income, or vice versa, having life insurance ensures that they are protected if something happens to you.

Setting Up An Investment Process To Meet Your Goals

Your investment process will be different than your neighbors, cousins, and coworkers. They are very personal, yet they all have one common denominator between them – they all start with goals. Goals are the most important aspect of investing. After all, if you do not have the end in mind, how will you know if you’re on the right track?

Start by setting SMART goals for your short and long-term investments.

Specific. Measurable. Achievable. Realistic. Time.

When you are setting your goals for your investments, they should fit into each one of the above categories. You will want to make sure your investment process has goals that are clear, well defined, measurable, attainable, within reach and relevant, and have a clearly defined timeline.

If you need a little guidance, do not hesitate to turn to a financial advisor. All financial companies set goals to help you understand where you currently are with your investments and help get you to where you’d like to be in the future.

What Investment Tools Can You Use To Set Up Your Goals?

We live in a technological age with a multitude of tools at our fingertips. Utilizing these tools can help you reach your investment goals.

Start with an online spending worksheet to determine where your money goes. This is an easy way to record your spending monthly, and bring your attention to smaller items, like coffee, lunches, and cash back, that could add up quickly over time. This tool can help you change your spending habits and allot more money for your investments if you see an area of overspending.

After you take a look at your spending habits, you can start searching for tools to help you reach your goals. Looking to save for a down payment on a new house? Find online calculators that let you plug in your income and expenses to determine how much you can spend, and what down payment will be required.

For long term investments, many people are turning to easier, convenient ways that automatically invest their funds directly from their paycheck or bank account. This is typically offered by your employers 401(k), but new apps on the market like Acorns or Robinhood can help you start investing immediately.

Another tool that many overlook is having an expert guide you. A financial advisor’s job is to help make you money! They can help you create strategies and provide you with investment options that will help you reach your goals.

List Of Common Things You Want To Invest In

Investments go far beyond stocks and retirement savings accounts. There are less common ways to invest in things, as well as yourself, that can end up helping your wealth over the course of your life.


Your home is a long-term investment. In fact, it takes many homeowners 4 years to recoup the upfront costs of homeownership. Add in the ongoing costs of owning a home, from property tax to home repairs, it might seem overwhelming. It’s important to not focus on the short-term investment of your home. Instead, look at the long-term appreciation on your property because it is one of the best long-term investments you can make!


When you take the time to invest in your education, it can reward you with a higher-paid career. Furthering your education isn’t limited by your age, and with just one extra year of schooling, the average person sees a return of approximately 9%! Compared to investing in stocks and bonds that only yield a 2.4% return, that seems like a pretty great investment!


Investing in your health is not always a cheap option. Cooking organic, healthy food is more than a quick dollar drive-thru burger. And paying for a fitness membership is an added expense monthly. But investing in healthy habits, including regular check ups and mental health therapy, can help avoid some pricey chronic conditions. Of course, it is not the be all and end all, but taking preventative care of yourself can help save you thousands in the grand scheme of things.

For example, people with cardiovascular disease spend $19,000 or more per year on medical care. Treating type 2 diabetes can cost hundreds of thousands over your lifetime. Invest in your health to save money over the course of your life.


Emergency funds are vital for every person and household. Typically, you should have six months’ worth of savings in case of an emergency. Job loss, medical leave, emergency home repairs, and more will no longer be a major worry when you have invested in your emergency fund.

What Is Your End Goal?

When defining your investment goals be sure to have the end goal in mind. Building wealth can and should be done at any stage in your life. You can have short-, medium-, and long-term investment goals all that focus on the allotted end timeline.

Turn To The Experts For Investment Help

Creating a viable investment strategy can be done DIY or can be done through a trusted financial advisor. There’s no right or wrong way to start investing but be sure to focus with your goals in mind.

Consider your timeline and your risk tolerance when you’re setting each of your goals and be sure to have realistic expectations. Investing properly is not an immediate, overnight wealth builder, but it can give you peace of mind over the course of your lifetime.