August 16th 2011

Setting realistic financial goals

Taking the time to sit down and think about our financial future isn’t always on everyone’s daily to-do list.

Sometimes, though, we can’t be bothered worrying about the small stuff (or what we think might be the small stuff).

But being able to picture ourselves in a comfortable scenario ten years down the road can give us the peace of mind we need.

To be financially independent, it is imperative that we look toward our future, and find a vision of what we want to be and where we want to be. Then, we just have to figure out how to make these dreams come true.

Unfortunately, it’s easy to be thrown off course. The economy constantly is in fluctuation, and can move up or down within a day. But we’re more likely to succeed if we think of the future and what is there waiting for us.

Investing is a helpful way to get there, and it doesn’t take much to make the right decisions.Once you figure out what you want and determine you goals, establishing financial objectives is much easier. The key is not to put money where you do not need it.

When you are looking toward these financial goals, look to invest in companies that you understand and agree with. Stay updated with their current status.

Working with a financial adviser is another way to set some realistic goals and stick to them. A good financial adviser will push you to the right decisions that are best for you, your life, and your future. They won’t try to convince you to invest in things that aren’t right for you or that you do not need. Good financial advisers know all of the pertinent details surrounding money.

Your financial adviser should set you in the direction to diversify, ensuring that you don’t put all your money in one place. Spread it around to different markets, stocks, mutual funds, bonds, savings plans, and other areas. A good rule of thumb is that no investment should be over ten percent of your total portfolio.

However, when planning for the future, we don’t always think about setting aside some money for emergencies. The truth of the matter is that emergencies do, indeed, happen, and by establishing an emergency fund, we have that security for if something does happen, we have a safety net. You don’t want to rely on cash advances or loans for an emergency. The interest rates will be through the roof.

So how do you begin?

First, figure out and write down your financial goals. These might range from saving for your kids to attend college, buying a new car, buying something you’re dreaming about, like a boat or cottage, saving for a down payment on a house, going on vacation, planning a wedding, paying off credit card debt, building a brand, or planning for retirement.

Next, divide each financial goal down into short-term (meaning less than 1 year), medium-term (ranging from 1 to 3 years) and long-term (5 years and over) goals.

Third, read about investing, such as keeping up on Forbes. Look at how you can reach your goals, and take the steps to get there. You can track progress of different money markets, and pick up tips for yourself along the way.

Finally, continually check where you are at. Each month, review your progress to see if your plan is working. That way, you can make changes before your current plan is tired and drawn out for too long.

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Andrew's Biography

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Andrew loves art and design, and pursues his studies in his final year at the Ontario College of Art and Design. He loves seeking out new artists and giving them their dues, and in his spare time, focuses on his own abstract sculpture.