It is important that you have to know your goals when you invest. With goals in mind,you will work for it until you achieve it. Achieving financial goals for your yourself and your family are something that we look forward to, that is why we work hard for it. Investing your money can help you to achieve your financial goals in the future because your money can work for you.
I’m a big fan of investing in Stock Market particularly investing long term which you will win. In stock market, you can position your financial goals for you to achieve it and it is possible. You just have to know what you would like to achieve when you invest in Stock Market be it your Retirement Fund,Travel Fund, Business Fund and etc. Your goal should be SMART(Specific,Measureable,Attainable,Realistic and Attainable) for you to work it out.
Let’s say you set a goal of achieving a college Fund for your child after 10 years and you want him to study in a good school. Let’s assume that you need Ph1,000,000 on the 10th year for your child to finish a 4-year course. Wow! Ph1M for a child to graduate? Yes it is, this is a conservative assumption only after 10 years because of inflation or the rise of the price. Assuming that every year the tuition fees will increase on the average of 10% per year. I have not included yet the transportation allowance,books, allowance, food , load allowance, load, laptops, etc.
If you save money in the bank for you to reach Ph1M after 10 years, you have to set aside ideally Ph100,000 per year but if you invest in Stock market for you to reach Ph1M on the 10th year on the assumption that it earns 8% per year on peso cost averaging, you will only save Ph70,000 per year or Ph17,500 per quarter you can have Ph,1,014,059.37.But if you save Ph70,000 per year in the bank, your money will be only Ph733,112.88.
Now, which one can help you to save more money and earn you more money for your future financial goals? Definitely,you will win in investing. Now, what if in investing in stock market gives you an average annual return of 14% which had happened in the last 10 years? You can achieve more than Ph1M which you can use for other expenses for your child’s education.
Your goal should be clear for you to work it out. You should understand the reason why you are investing in the first place that is why you are willing to sacrifice something now for you to gain more in the future. Even though the stock market goes up and down, you will still to invest consistently because you are after the long term benefit. You need also to to talk to a Financial Planner to guide you if which kind of investment fits you for you to achieve your financial goals in the future. As they say, a goal without a plan is just a wish.
Thank you for reading my blog, I hope that you learned something today. Let’s start to invest with goals.