Set Goals as You Save & Invest: Turn your intent into a commitment
Goals give you focus. To find and establish your investing and saving goals, first ask yourself what you want to accomplish. Do you want to build an emergency fund? Build college savings for your child? Have a large retirement fund by age 60? Once you have a defined motivation, a monetary goal can arise.
It can be easier to dedicate yourself to a goal rather than a hope or a wish. That level of dedication is important, as saving and investing usually comes with a degree of personal sacrifice. When you dedicate yourself to a saving/investing goal, some positive financial “side effects” may occur.
A goal encourages you to save consistently. If you are saving and investing to reach a specific dollar figure, you likely also have a date for reaching it in mind. Pair a date with a saving or investing goal, and you have a time horizon, a self-imposed deadline, and you can start to see how you need to save or invest to try and achieve your goal, and what kind of savings or investments to put to work on your behalf.
You see the goal within a larger financial context. This big-picture perspective may help you from making frivolous purchases you might later regret or taking on a big debt that might impede your progress toward reaching your target.
You see clear steps toward your goal. Saving $1 million over a lifetime might seem daunting to the average person who has never looked at how it might be done incrementally. Once the math is in place, it might not seem so inconceivable. The intimidation of trying to reach that large number gives way to confidence – the feeling that you could realize that objective by contributing a set amount per month over a period of years.
Those discrete steps can make the goal seem less abstract. As you save and invest, you may make good progress toward the goal and attain milestones along the way. These milestones are affirmations, reinforcing that you are on a positive path and that you are paying yourself first.
Additionally, the earlier you define a goal, the more time you have to try and attain it. Time is certainly your friend here. Say you want to invest and build up a retirement fund of $500,000 in 30 years. If you save $500 a month for three decades through a retirement account returning 7% annually, you will have $591,839 when that 30-year period ends. If you give yourself just 20 years to try and save $500,000 with the same rate of return, you may need to make monthly contributions of about $975. (To be precise, the math says that over two decades, monthly contributions of about $975 will leave you with $501,419.)1
When you save and invest with goals in mind, you make a commitment. From that commitment, a plan or strategy emerges. In contrast, others will save a little here, invest a little there, and hope for the best – but as the saying goes, hope is not a strategy
Ronit Rogoszinski, CFP® may be reached at 800.773.9282 or rrogoszinski@slatestonewealth.com
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
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To contact Ronit please feel free to reach her on 800-773-9282 or rrogoszinski@slatestonewealth.com
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Citations.
1 – bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx [4/26/18]
Ronit Rogoszinski has been demystifying investment strategies for individuals, families and business owners for over 25 years. Specializing in transitioning widows and widowers, pre-retirees and divorced individuals through major life changes, Ronit’s expertise is translated to actionable, prudent strategies that are customized to each individual’s unique situation. As a result, Ronit has become a trusted advisor to her clients, developing lifelong friendships while partnering in the management of their financial plans.
Author: Ronit Rogoszinski
Ronit Rogoszinski is a passionate advocate of financial literacy for women who specialized in transitioning widows, pre-retirees and divorced individuals through major life changes. Applying her skills to each client’s circumstances enables her to translate recommendations into actionable, prudent strategies that are customized to each clients’ unique situation. As a result, Ronit has become a trusted advisor to her clients, developing lifelong friendships while partnering in the management of their financial plans. Ronit is a CERTIFIED FINANCIAL PLANNER ™ certificant who combines formal education with life long experience, which has led to a holistic all-encompassing approach for her clients and the creation of Women+Wealth Solutions. Individuals and families with inheritance, legal settlements, or sale of businesses who seek to become educated and confident in working with their financial advisor, look to Ronit for guidance in gaining financial knowledge, budget and cash flow management, portfolio and retirement solutions, as well as working with other outside professionals to best serve the client with guidance towards legal and tax solutions. Ronit’s calm, personal and relaxed nature helps put her clients at ease while remaining focused on the mission at hand, which is to help her clients realize their financial goals. Securities offered through...
