Fisher Investments Australia takes the time to understand your overall financial situation, including your financial goals, needs, investment time horizon and more. At the conclusion of a detailed review, we may recommend, where deemed suitable, an asset allocation strategy we feel best fits your particular situation, along with a recommendation for the discretionary investment management services of our parent company, Fisher Investments. Fisher Investments Australia partially outsources aspects of the day-to-day investment advice, portfolio management, and trading functions to its affiliates.
The Importance of Clear Financial Goals
Determining your financial goals may be one of the most important things you can do to help achieve long-term investing success. When you’re young, you tend to have fairly simple, short-term financial goals: establishing an emergency fund, buying a new car or accumulating a down payment for your first home. But, as you become more financially stable, your goals should reflect the increasing complexity of responsibly managing your wealth.
Where to Begin
Identify Your Goals
Setting financial goals can be challenging, and most people don’t know where to start without consulting a financial adviser. Financial goals don’t just have to be about saving money. They can be tied to anything about your finances. Drafting a will, assigning account beneficiaries and selecting a power of attorney in the event you become incapacitated can all be financial goals—and are all things worth doing! In many cases, common financial or investment goals may include:
Goal 1: Avoid Running Out of Money
For some investors, this is their primary goal to ensure they avoid poverty in their retirement. Whilst some believe the key to avoid running out of money is to invest in low-volatility investments (fixed interest, for example), this approach isn’t always prudent and could even be detrimental.
Goal 2: Maintain or Improve Lifestyle
If you want to ensure your pre-retirement lifestyle continues or improves throughout retirement, then you’ll want to maintain or grow your purchasing power. But inflation will have an impact, so it’s important to consider this in your retirement plan.
Goal 3: Increase Wealth
If you’re able to enjoy your desired retirement lifestyle without fear of depleting your assets during your lifetime, it’s possible you wish to grow your investments over a period beyond your life expectancy. Common goals are to leave a legacy for heirs or a charity.
By listing out your personal finance objectives, you can hold yourself accountable and increase the odds you achieve them. There is a reason many of us still make grocery lists! They reduce the chance we forget something critical.
Identify Your Investment Time Horizon
Once you’ve identified your financial goals, it is important to determine the length of time you need your money to last so you can achieve these goals—also known as your “investment time horizon.” For long-term goals, this may be your life expectancy or even extend beyond that—particularly if your money must provide for others. Short-term goals may only require a specific number of years, for example, setting aside a specific monthly amount for five years to pay for a kitchen renovation.
Assess Your Financial Picture
Another important part of achieving your financial goals is having a clear understanding of your current and expected future financial situation. For example, you should document your current income, expenses, investments, debts and savings. Likewise, you should identify future cash-flow needs required to help provide you with a comfortable lifestyle in retirement.
Achieving your financial goals isn’t easy, but Fisher Investments Australia can help. Through our parent company, Fisher Investments, clients receive tailored portfolio management services, investment advice and the right support to help them stay on track.
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*As of 01/07/2024
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