How do you set SMART financial goals?
SMART Financial Goals identify Specific outcomes; indicate Measurable and Achievable actions; recognize the Reasons for wanting to attain them; and establish Target dates for completion. Goals should be in writing. If you have multiple goals, they should be prioritized. If you are married or getting married, both of you should agree on your goals and how to achieve them. Set SMART goals to keep you motivated and focused.
What are long-term financial goals?
Long-term financial goals are those goals with a target date more than five years away. For long-term financial goals, you have to grow your assets to counteract the effects of inflation, but you don’t have to worry as much about short-term market volatility or liquidity.
Since your investments are long term (over 5 years away), when there is a correction in the market, there is less reason to panic. Too many people get
nervous and sell when prices are down. When the market reaches new highs, they get comfortable and want to buy. That’s not a recommended way for investing in the stock market.
As the target date of your financial goal approaches five years, you should move assets designated to that goal to less volatile and higher liquid investments. (That long-term goal transforms into a short-term goal.)MORE >