Boost your savings with S.M.A.R.T. investment goals
Taking the S.M.A.R.T route can help you reach your goals sooner.
Importance of setting investment goals
Goals are not only for winning on the soccer field, it is also for winning at life. Part of winning at life is making more money to improve your standard of living. Being a winner at the money game means you need to be SMART and hit those investment goals to guarantee success. Do not get red carded in the middle of the game by not having investment goals. Stay in the game and kick that ball into the back of the net and score big. Set investment goals and start investing today!
What are investment goals?
Investment goals are the results that are expected to be achieved and can be described as the aim or purpose of investing. It is the anticipated outcomes that you desire to accomplish from investing or the desired returns you want to realize from your investment.
Defining your investment goals
It is very important that your investment goals are defined using the SMART technique. The SMART technique allows your investment goals to be easily achieved as it makes them specific, measurable, attainable, realistic and time bound.
SPECIFIC – Investment goals should be precise and as detailed as possible. It must describe what is to be accomplished exactly.
MEASURABLE – It is imperative that the investment goals that are set can be measured. Some numeric value must be attached to it, so by analyzing the results, it is clear if it has been achieved or how much is left to be achieved.
ATTAINABLE – All investment goals that are proposed must be achievable. It is good to be ambitious, but the goals should be possible.
REALISTIC – Investment goals need to be sensible. They must be achievable using the resources that are already available.
TIME BOUND – Set a time frame in which investment goals should be achieved. Investment goals can be short term – less than a year, medium term – between one and three years and long term – between three to five years.
How to conceptualize your investment goals
After defining your investment goals, it is time to conceptualize them. Ask yourself the following questions relevant to setting your investment goals:
SPECIFIC – What type of investment do I want to achieve?
MEASURABLE – What type of earnings do I want to achieve from this investment?
ATTAINABLE – Can I achieve this investment in the specified time
REALISTIC – Do I have the resources to achieve this investment?
TIME BOUND – How long will I take to achieve this investment?
How to set your investment goals with examples
After conceptualizing your investment goals, it is time to set them. Take a minute to think about what investment goals you want to achieve and in what time frame you wish to do so. Write down the answers to the questions above on a piece of paper as this will assist in setting your investment goals:
SPECIFIC – I want to purchase stocks in different local companies from three different industries (manufacturing, telecoms and finance).
MEASURABLE – I want to increase my stock portfolio by 5% after the initial purchase.
ATTAINABLE – I want to achieve at least a 4% dividend return per annum on my stock portfolio (instead of a less attainable dividend return figure of 25% for one year).
REALISTIC – I want to use the $1,000 saved in my fixed deposit account to start purchasing my stock portfolio.
TIME BOUND – I want to achieve the purchase and growth of my stock portfolio within the next two (2) years or in the medium term.
Achieving your investment goals
Now that you have set your investment goals, it is time to slowly work towards them and ensure that they are being achieved. Keep checking on your progress at regular intervals. If for any reason you realize that you will not be able to achieve the specified outcome within the desired time frame, then you will have to review your investment goals immediately to get back on track. Learn how to Create a Budget and use our free Personal Budget Tracker to keep you on track.
Remember to keep your eye on the ball and aim for the back of the net in the money game. For best results use the SMART technique to define your investment goals to make them specific, measurable, attainable, realistic and time bound. Conceptualize and set them, then watch them become a reality. What are your first set of investment goals?