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Setting Goals As You Save & Invest

September 8, 2019 by Cody and Associates

Turn Your Intent Into A Commitment.

In personal finance, as with most areas of life, goals help us to grow and achieve more. Here are a couple reasons why we think each family should have financial goals put in place.

GOALS GIVE YOU FOCUS.

To find and establish your investing and saving goals, first ask yourself what you want to accomplish. Do you want to build an emergency fund? Build college savings for your child? Have a large retirement fund by age 60? Once you have a defined motivation, a monetary goal can arise.

It can be easier to dedicate yourself to a goal rather than a hope or a wish. That level of dedication is important, as saving and investing usually comes with a degree of personal sacrifice. When you dedicate yourself to a saving/investing goal like retiring one day, some positive financial “side effects” may occur.  

A GOAL ENCOURAGES YOU TO SAVE CONSISTENTLY.

If you are saving and investing to reach a specific dollar figure, you likely also have a date for reaching it in mind. Pair a date with a saving or investing goal, and you have a time horizon, a self-imposed deadline, and you can start to see how you need to save or invest to try and achieve your goal, and what kind of savings or investments to put to work on your behalf.

YOU SEE THE GOAL WITHIN A LARGER FINANCIAL CONTEXT.

This big-picture perspective may help you from making money mistakes you might later regret or break bad habits that might impede your progress toward reaching your target.

YOU SEE CLEAR STEPS TOWARD YOUR GOAL.

Saving $1 million over a lifetime might seem daunting to the average person who has never looked at how it might be done incrementally. Once the math is in place, it might not seem so inconceivable. The intimidation of trying to reach that large number gives way to confidence – the feeling that you could realize that objective by contributing a set amount per month over a period of years.

THOSE DISCRETE STEPS CAN MAKE THE GOAL SEEM LESS ABSTRACT.

As you save and invest, you may make good progress toward the goal and attain milestones along the way. These milestones are affirmations, reinforcing that you are on a positive path and that you are paying yourself first.

ADDITIONALLY, THE EARLIER YOU DEFINE A GOAL, THE MORE TIME YOU HAVE TO TRY AND ATTAIN IT.

If you are younger, time is certainly your friend here. Say you want to invest and build up a retirement fund of $500,000 in 30 years. If you save $500 a month for three decades through a retirement account returning 7% annually, you will have $613,544 when that 30-year period ends. If you give yourself just 20 years to try and save $500,000 with the same time frame and rate of return, you may need to make monthly contributions of about $975. (To be precise, the math says that over two decades, monthly contributions of about $975 will leave you with $510,866.)1

WHEN YOU SAVE AND INVEST WITH GOALS IN MIND, YOU MAKE A COMMITMENT.

From that commitment, a plan or strategy emerges. In contrast, others will save a little here, invest a little there, and hope for the best – but as the saying goes, hope is not a strategy.

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(855) 383-2639

Jeff Cody, LUTCF, FSS
Jeff Cody & Associates

Serving clients throughout
the United States and the U.S. Virgin Islands

Investment Advisor Services Offered Through First Advisors National
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Copyright 2020 Cody & Associates • Cody and Associates is a financial services company that specializes in asset protection and retirement income products and services. Jeffrey A. Cody is the principal owner of Jeff Cody and Associates and only offers insurance products and services in states where licensed to do so. Investment advisory services are offered through First Advisors National, LLC ("FAN Advisors"). FAN Advisors is an investment advisor firm registered pursuant to the regulations of the U.S. Securities and Exchange Commission (SEC). Jeffrey A. Cody is an investment advisor representative of FAN Advisors and is registered to only offer specific advisory services through FAN Advisors. FAN Advisors does not offer insurance services. The FAN Advisors written disclosure document is available upon request; please review it for details regarding advisory services, FAN Advisors and Jeff Cody and Associates are independently owned and operated. [READ DISCLOSURES]
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