Hagemann Wealth Management

goal setting in investing

Goal Setting in Investing

A thing that holds many considering investing back is goals. Often, they enter into an investment without any plan in mind, which makes them hesitant to make any moves. Having a clear one will steer the direction of your actions and keep you focused.

If you want a clearer path to investing, consider consulting with a wealth management firm in Illinois like Hagemann Wealth Management. They can help create solid plans based on your goals.

The Concept of Goal-Based Investing

Goal-based investing or GBI is a newer approach when it comes to wealth building. Instead of chasing after what provides the highest returns, it instead focuses on a specific outcome. For example, you could be investing for:

Often people get into GBI to set a long-term goal, though it isn’t limited to that. You can invest based on shorter-term plans which can change how you approach the portfolio. It isn’t a one-size-fits-all plan either. You may have to change your approach depending on the timeframe and goals you have.

For example, if you are planning on retiring in a few years and don’t want to risk your money, you could settle for something considered to be a less volatile investment. Bonds may typically have less stock market associated with them.

Setting Your Goal

One of the challenges of getting into goal-based investing is setting up your goals. There may be many things you want to achieve. You have to weigh priorities and see what’s more important when it comes to directing your investments. Often, you’ll have to map out your life plan and compare it with your investment plan.

That way, you have something tangible to measure your progress. You can check performance on a monthly or quarterly basis and adjust as needed. As long as you keep things SMART, your goals will be attainable.

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-Based

It may take some time to set clear goals. You’ll have to write things down and put in as many details as possible.

For example, if you want to save for a home, you want to see how much money you can put towards the goal and what investments work best. If you have other priorities that you’d like your portfolio to cover, then you can consider making multiple portfolios for each.

A Goal Makes Investing Easier

When you have a goal, you’ll know what you need to achieve it. Then you might even realize that you won’t need to use as much of your current income to reach that goal. It retains your purchasing power, and you’ll still have the freedom to contribute more to your investments if you want to.

If you’re struggling with creating a goal-based plan, consider hiring financial planners in Illinois such as Hagemann Wealth Management. Contact us today to find out more about how our financial experts can assist you.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Leave a Comment

Your email address will not be published.

Scroll to Top