Setting goals: The first step in creating an investment plan

Two women sit and discuss plans

Creating an investment plan that is meaningful to you starts with determining the goals you want to achieve.

We plan our weekends. We plan our weddings, careers, and futures. Planning not only helps set us up for successful outcomes in the future but can also help immensely in the present. It helps us define and refine our goals, align tactics, proactively address risks, and chart our progress.

Too often, however, the planning that could be the most valuable is overlooked. The same people who would not dream of embarking on a two-week vacation to Italy without an hour-by-hour itinerary may have just a basic outline of a plan for their retirement, which could last 20 to 30 years.

What drives this disconnect?

Many of us are intimidated by the thought of putting our plans on paper. Others fail to grasp the value of the planning process. One of the most common mistakes is thinking your situation is very simple and straightforward so you don’t need a plan.

This misconception can stem from a misunderstanding of exactly what constitutes a plan and an assumption that planning ought to be comprehensive enough to meet the needs of the rest of your life. Planning should meet you where you are and reflect your current situation. Your investment goals and your plan will evolve with you over time.

Effective plans are generally the ones that take your individual circumstances and those of your family into account. They should start with your goals and objectives and may encompass planning for investments, retirement, taxes, and wealth transfer.

As you map out your goals, consider the following:

  • Are you thinking of starting a business?
  • Are you exploring buying a second home or is there another big purchase that you would like to make at some point in the future?
  • Do you want to travel extensively after you retire?
  • Have you promised your children or grandchildren that you’ll help pay for their college education or for them to study abroad?
  • Do you need to build or rebuild an emergency fund for unforeseen expenses?
  • Is there a community program or charitable cause you’d like to support more robustly?

One way to express your goals is to think of them as your own personal story that you are intending to write. For example:

“Now that I have my first grandchild, I’d like to save enough to help me comfortably retire so I can spend more time with my family. My spouse and I have had a lifelong dream of road tripping across the country once I retire. As we get older, I want to build up a savings fund for medical needs and start a legacy fund to help financially support my children and my grandchild.”


“I am passionate about supporting local businesses and have a goal of opening my own restaurant that partners with local vendors. I want to have enough money to start the business while helping grow our nest egg in case we need to dip into it while we are starting out. If we’re successful, I hope to expand the business by opening an additional location.”

After identifying your goals, the next step is to understand how much money you will need for each goal. This information will help you determine your saving and investing priorities, your time horizon for each goal, and the amount of investment risk you’re comfortable taking to achieve each goal.

There’s no one-size-fits-all answer to achieve each goal. Life throws curveballs and your priorities may change; however, people who have a plan may be more prepared for life’s events and feel more comfortable that their goals will be met.