Michael Jordan has goals that are great for Montana, and Tiger Woods for a reason. The same is true for those entering the investment field, have a goal in your career and set your mind to reach that goal. Before making your first transaction in the world of stock investing, you should ask yourself, what do you hope to achieve?
Everyone loves to volunteer, but it has the space and time and is not found in the stock investment world.
Most investors want a good return on their investment. But what is considered a good return? Is it enough to retire? If it depends on what they want for retirement, then the question is, what is the retirement age? If it is in two years, your investment strategy will be very different than those who will retire in 15 years.
For example, let me use you as a regular investor. 40 years old with good income and ability to invest $300 per month. We need to change our circumstances a little,bit and imagine that I have nothing in my portfolio but the ultimate dream I have - $1 million to retire. The question is, if I have $300 available now, will I be able to achieve my goal?
Assuming I can match the stock index returns running at 10.4% per annum - my total will be approximately $380,000 by the time I retire at age 65.
**** - I missed my $1,000,000 goal!
To reach that level - I have to invest more than $300 per month. (I need at least 17 - 18% p.a. return to beat this.
OK - the index fund doesn't do that for me, especially in the history of the Shaw it does no better than the 10.5% mark!)
Okay - let's see another scene for me?
Suppose I am actually working on my investments and money for a while (my dad listens to me !!) and I have over $100,000 in savings.
Can I get a target 'million' out of that amount at once as a starter?
Well, if I am willing to use index funds as an investment vehicle of my choice, the answer is yes!
If any major market volatility persists and persists (ignoring the standard volatility in which you invest longer) I should have a $1,000,000 mark by the time I retire - and add another percentage. Not even for my savings.
But what made it possible for me to hit my target? In fact, I have a goal.
Goal - Goal - Goal, all of which help us to focus on reaching the end of the race with the desired result.
Goals that help you focus on your investment can help you formulate your investment plan.
Do you need to be aggressive and look for bigger returns, or can you save your savings and get more modest returns to reach your goal?
Always keep this in mind and set yourself (realistically) towards it.
Be humble and concentrated.
To invest is to allocate money with the expectation of a positive benefit/ ''return'' to the future. In other words, to invest means owning an asset or an item with the goal of generating income from the investment...
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