Do-It-Yourself Financial Plan step #4 is goals. After you have buildt a strong financial foundation of cash reserves,estate plan, and risk management,you can build wealth according to your time frame, your return needs, and your risk tolerance . Notice I didn’t say the markets. That is an important point. Most of the market swings have nothing to do you but rather factors that are out of your control.

I had a friend who said all his friends lost money in the market and he felt lucky that he was all in cash . After that he asked me how he can invest for better returns.

You don’t lose any money unless you sell your positions . You are gambling, not investing, If you sell every time the market moves up or down . You need to be a long term player, if you want to invest for larger returns than what you can get in cash or bonds . That means leaving it alone for 5 to 10 years. Are you up for that? (If not, that’s okay but you will need to stay in cash and accept low returns for the low risk you are taking.)

Great! Ask yourself these questions to figure out how to invest :

What am I investing for? (retirement, college, boat, first or second home,)

How long do I have to invest for this goal?  (10 years or 25 or what?)

How much risk am I will to take to reach this goal? (more risk means more volatility and more long term type investments)

How much money can I invest now and in the future to reach this goal? (What are you will to do to make your goals a reality?)

Am I willing to commit to this over the long term to achieve my goal ? ( You still need to commit to meeting your target although goals can be modified ).

Investing is easy but answering the above questions is the hard part. But the answers above are an essential part of what you will need to be a successful investor . Why? Because if you don’t know what you are aiming for -you won’t hit it. If you don’t know what it will take to achieve your goal, you won’t contribute to it’s success.  You will surely lose money, if you don’t have a goal and just want the maximum return .

My clients who know what they want, and how to get and are willing to do what it takes to achieve that, are successful in accomplishing their financial goals. Are you? -Fern Alix LaRocca CFP® Wealth Coach

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