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5 Tips to Help Set Your Investment Goals



Making sure you’re financially secure in every stage of life is one of the most valuable things you can do for yourself. But to do it well, it’s important to plan around how you’ll spend, save, and invest your money.

Keep your plan flexible, because things change all the time. And also think ahead a bit as you put your plan together, because time flies. (Just ask your parents.)

Most of us have the spending and saving parts pretty much figured out by the time we reach adulthood. It’s understanding how to invest our money that’s downright daunting. It’s easy to keep putting it off, but the sooner you jump in—even if it’s a small amount each month—the better.

The good news is you don’t have to go it alone. There are plenty of services you can tap for investing advice both in person and online.

But before you begin building an investment portfolio—and choosing the tools and strategies you’ll use—it’s important to know what you’re trying to achieve. Ask yourself what you really want and how you can make those things happen. Here are some tips on how to set investment goals:

Be Realistic and Specific


Deciding you want to be “rich” or “successful” or that you “want to travel” is great, but you’ll need to define what those terms mean to you and come up with specific steps for how you’ll get there.

You also should have some understanding of what your risk tolerance is—both fiscally and emotionally. If you’re investing in the markets, for example, how much uncertainty can you accept without losing sleep, and how much can you afford to lose without going broke?

Write it Down


You don’t have to put together a vision board with a cute collage depicting your financial ambitions, but it really does help to write down your goals and revisit that list from time to time. As part of her research into business and life achievement, Gail Matthews , a clinical psychologist and professor at Dominican University in California, found test subjects who wrote down and shared their goals with others were significantly more successful in accomplishing them.

Zig Ziglar, Tony Robbins, Richard Branson, and Warren Buffett are all fans of prioritizing goals by writing them down. If you love a good to-do list, this is a no-brainer for you. But it’s a good start for everyone—and it can help you stay on-task whether you decide to DIY your investments or work with a financial advisor.

Plot Your Goals on a Timeline


Goals-based investing should consider both current and future needs. If you haven’t managed it yet, most financial advisors advise setting up an emergency fund to handle any unexpected expenses that come up through the years.

Depending on where you are in life and your risk tolerance, consider funding an emergency account that should be enough to cover three to 12 months’ worth of living expenses. On the other end of that timeline is the ultimate long-term investment goal: retirement.

You can get some idea of what you’ll need to have the lifestyle you want with an online retirement calculator. Remember, your retirement could last for 20 to 30 years or longer. Between that emergency fund and retirement, you’ve got a lot of living to do.

So plot your intermediate goals (buying a house or going back to school) and your longer-term goals (paying for your kids’ education and weddings). Don’t forget the fun stuff (a trip to Europe or joining the country club). And try to realistically estimate what those things will cost.

You can always make changes, and as you approach each goal on the timeline, you’ll probably want to make a more exacting budget. But coming up with a clear overall time horizon can help keep you on track and motivated toward seeing those goals actually happen.

Plan with a Purpose


Another way to stay motivated is to understand the purpose of the products and strategies you employ in your financial plan. With a 401(k) or automated investment account, it’s easy to just set it and forget it. But a plan that works for a 30-year-old is not designed for a 60-year-old.

Your needs will change, and so will your risk tolerance as you age. If the markets go through a correction or worse, and your investments suffer a major loss, you’ll have plenty of time to recover if you’re young. If you’re near or in retirement, on the other hand, a large loss could be devastating to your lifestyle.

And even a bull market requires making some adjustments from time to time. A portfolio that deviates too far from its target asset allocation (for instance, if the stock/bond percentage is off) will need to be rebalanced to bring it back in line. You’ll probably also want your plan to include tools and strategies that save you money by improving tax-efficiency and dealing with inflation.

Don’t Get Swayed by FOMO


Fear of missing out is a trap. Sure, you’ll want to share your goals with supportive friends and family members. But don’t base your wish list—or your investment portfolio—on what others are doing.

Try to ignore the coworker who brags about his stock market returns or real estate schemes; he may have a different risk tolerance than you. Maybe he can afford to venture into investments with more volatility, or perhaps he just doesn’t mind the potential peril.

If it makes sense, stick to the financial plan you’ve put together with your individual circumstances in mind. Once you have your goals in mind—and on paper—you can get to work making them a reality.

If you’re ready to start investing—or to go beyond your workplace 401(k)—you’ll find there are lots of different kinds of financial advisors out there and various levels of help. You can do it all on your own or engage a full-service investment firm. Or you can shoot for the middle-ground.

With a hybrid automated-investing service like SoFi Invest, you can open and access your portfolio on your computer or on your phone, but there are human financial advisors ready to help out whenever you need a consultation.

SoFi’s financial advisors are paid a salary, not a commission like many investment advisors. You can open a SoFi Invest account with a minimum investment of $1.

You can choose between a taxable or a retirement account. Either way, there are various portfolio options, so you can get what you want based on your needs and risk tolerance.

And if the mix in the account you choose is affected in a way that no longer fits the ratio you wanted, your SoFi account will rebalance automatically—you don’t have to meet with an advisor to make it happen.

If you’ve been putting off getting into investing because it seemed too complicated, it might be time to reconsider. SoFi Invest’s online tools and financial advisors can assist you in setting up a portfolio that aligns with your priorities. It doesn’t get easier than that.

Ready to take action to meet your financial goals? SoFi Invest can help. Open an investment account today.

Learn More


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA /SIPC .
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