1. My #1 goal is to make a substantial contribution to my church's building program.
2. There is no firm timeline, but the church is now planning the building. I am guessing maybe 1 to 3 years?
3. My preference would be for a one-time gift, but there could be other options.
4. I have in mind $50 to 100K. As a retiree, I likely could not do this from existing funds, but want to invest to accomplish this goal.
5. I am expectant, but not sure I can do this, so perhaps a 3 rating.
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Robert M
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Original Message:
Sent: 10-21-2021 19:04
From: Jenna Brashear
Subject: Lesson 4: The Key Components of Goals
There are five key components of goals: what the goal is, when it will be reached, its duration, its cost and its priority relative to other goals. Watch and learn why each of these components is important to creating your own wealth-building plan.
Reflect
Now that you've watched Lesson 4, we'd like you to take some time to consider five key components of the goal-setting process.
1. Defining your goals: In the last lesson, we defined our short- and long-term goals which will help us determine what types of investments we will need to achieve those objectives.
2. Estimating when it will be reached: If your goal is to buy a boat to travel the globe, you need to ask yourself: "when did I start saving for this?", "where am I currently?", and "when do I want to achieve this goal?". Estimating a timeline for your goal will help you understand the amount of time you have to invest and save.
3. Analyzing how long you expect the goal to last: Thinking about the duration of your goal is important to accurately plan how long your objective will last you. For example, if your goal is to retire at 65, you will have to plan for your savings to last you from when you turn 65 and onward. If your parents live until they were in their 90s, that's a good estimate for your goal duration - 20+ years.
4. Evaluating how much it will cost: Take a look at your current spending, incorporate inflation, and plan for additional leeway. Even though this may be a rough estimate, approximating the cost of your goals will help you plan how much you will eventually need.
5. Adjusting its priority in relation to other goals: These priority goals will need to be addressed first. If you had to favor one goal over another, what would it be?
Breaking up goals into key components helps investors analyze their current plan to see if they are hitting each point. Did you plan for your goals' duration? Have you prioritized the right goals? Are you considering the estimated cost to achieve your goals? These are crucial factors that will help shape your asset allocation and overall portfolio.
Engage
After you reflect, pick your top priority goal and break it down using the five key components listed above (if you don't want to share all just write "skip" by the number). Additionally, rate how you feel about achieving your goals on a scale from 1-5 (1 being mostly uncertain and 5 being very certain). Let us know in the comments by clicking "Reply" on the right side of this discussion post.
Example:
1. My long-term goal is traveling to Europe (a 2-week trip) annually.
2. I will start my 2-week annual trips to Europe when I am 35 years old until I'm around 65 years old.
3. The duration of my goal is around 30 years that I will need to plan for.
4. My estimate is $1000 per week + $600 round trip flight = $2600 each trip x 30 years = $78,000 is the estimate for my total goal cost.
5. Traveling is my top priority goal, followed by retirement as my second.
My Rating: 4 (pretty certain my investments will allow me around $78,000 for travel)
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Jenna Brashear
AAII Community Manager
Chicago, IL
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