Setting Successful Investment Goals

Setting Successful Investment Goals



Imagine putting $100 under the pillow every month and not touching the money until you decide you want to buy a house, or a car, or retire.

Will you have enough money? That is what investing is like if you don’t set clear cut goals and right investment strategy.

If you don’t set goals or have an investment strategy, then you’re implicitly handing your life over to divine fate and betting on luck to provide for your needs. When you set goals and devise a strategy, you’re pro-actively choosing a life-path with self-responsibility and playing an active role in your destiny – and that can make difference between success and failure.

While specific goals will vary, what is common to all is that we are much more likely to achieve those goals if we can articulate what we want, determine what steps need to be taken to get there, and measure our progress time and again to make sure we are on track.

Investment Goal setting does not need to be hard work. It is a fairly simple process and can be done in whatever way works best for you. However, we suggest that are a few important steps that you must take in to account to devise your strategy:

Step 1- What is your time horizon?

Time horizon is the number of years you will require to be invested to meet your set goal. Each investment goal you set will have a different time horizon. For example, some goals will be long term (15 years to plan and achieve), some goals will be short term (5 years or less to plan and achieve), and some will be intermediate term (between 5 and 15 years to plan and achieve). Estimating time horizon will help you determine how aggressively you will need to invest and accumulate the amount you need to achieve your goals.

Step 2 – How much you will need to invest?

Start by determining how much you will need to set aside monthly or annually to meet your each goal. Although you will aspire to invest as much as possible, choose a realistic amount that will take into account your current financial obligations, this will ensure you can stick to your plan for the term your decide.

Step 3 – Which investment should you choose?

When it comes to choosing an investment, understanding ‘Your Risk Tolerance’ is most important. All investments carry some risk, some carry more than the others. Are you willing to accept high risk for high returns or low risk for decent returns? Always remember, whatever your goals, your objective is to maximize returns without taking more risk than you can bear i.e. ‘Your Risk Tolerance’.


With a specific time horizon, disciplined approach to investing and a right investment is key to Successful Investing!!

Key: The figures below are inflation (2.5%) adjusted

Investment Goal with Time Horizon At 3.5% you will need to invest At 8% you will need to invest At 12% you will need to invest
$20000 in 5 years $345 per month $306 per month $275 per month
$50000 in 10 years $445 per month $348 per month $276 per month
$100000 in 15 years $612 per month $416 per month $288 per month
$250000 in 15 years $1528 per month $1040 per month $718 per month

Sandeep Prabhu profileby Sandeep Prabhu

Personal Wealth Manager