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Setting goals to achieve financial freedom

How we manage those choices determines the outcome of our life. We all want financial freedom as early as possible in life, but how will we achieve it? Financial goal setting is the key to building wealth.

There will always be bumps in the road on every journey, so it’s essential to be flexible enough to adjust your plans when the unexpected happens. Your wealth creation objectives need to be adaptable, so as to complement life’s event.

Creating and maintaining the right investment strategy plays a vital role in helping to secure your financial future. Whether you are looking to invest for income in retirement, we can provide bespoke advice to help you achieve your financial goals. So, what do you need to consider?

Set a goal and start early

Short term goals are generally easy to achieve as they don’t really involve any planning, but longer-term goals require you to plan to achieve the goal. Remember, wealth creation is about creating a lifestyle of your choosing, and the earlier you start to invest, the sooner you can enjoy the benefits of compound growth working for you to build value and make your money work harder for you.

By taking the time to step into your future through cash-flow modelling, you can look back and visualise what needs to happen today for you to enjoy the lifestyle you want tomorrow. Ask yourself these three questions to help you visualise your future needs:

  • What do I have?
  • What do I want?
  • When do I want it?
  • Develop an investment habit

If you think that investing a few hundred euro every month will offer little in return, think again. To start your investment strategy, you should adopt a stable and organised investment routine.

Compound interest is the central pillar of investing and is why investing works so well over the long term.

The more you invest and the earlier you start will mean your investments have more time and potential to grow. By investing early and staying invested, you’ll also be able to take advantage of compound earnings. Making money on your money is the concept behind compounding – when the money you earn from your investments is reinvested for the opportunity to earn even more. However, keep in mind that while compounding can make an impact over many years, there may be periods where your money won’t grow.

Be consistent

Many people stop their investment planning particularly during market downturns, as we’ve seen recently. By doing this, they can miss out on opportunities to invest at lower prices. If you keep to your investment strategy and keep moving ahead consistently, this helps spread risk and enables you to grow your wealth for the long term through unit-cost averaging and careful asset allocation.

It’s important to remember that investing is an ongoing process. The right way to begin your investment strategy is by establishing goals that need to be achieved over the short, medium and long term. Secondly, assess your current position in the financial lifecycle. Thirdly, ascertain your risk profile, as that decides how much risk you should take while investing. This is important as different financial objectives require different investments approaches.

Maintain a well-diversified portfolio with regular reviews

Regular reviews of your portfolio enable you to adjust your portfolio to meet your changing needs and risk appetite at different stages of your life and in different market conditions. This helps you keep up your investing momentum towards achieving your long-term financial goals. It’s also important not to put all your investment eggs into one basket e.g. during The Global Financial Crisis in 2008/09 a lot of Irish people were heavily invested in Bank shares.

Investing randomly into different asset classes without ascertaining their asset allocation, not following a disciplined approach to investing, exiting abruptly from an asset class and investing without a clear time horizon, are some of the most apparent inconsistencies in any investment process.

At SYS Group we take our clients on their financial journey through holistic financial planning, as we understand that choosing how to invest your money can be overwhelming.

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