What’s the best way to start investing? Start with your goals

Goal-based investing is all about identifying your financial goals, setting a timeline for each one and investing regularly to reach them. Whether your goals include buying a car, renovating your bathroom, paying for your child’s education or retiring at 60, goal-based investing puts your dreams at the forefront of your investment strategy.

“Often when I'm speaking with women about what's important to them, they speak about certain events, certain things they want to achieve and accomplish with money,” says Viglaski. “For many of us, there's a laundry list of things we'd like to achieve during our lives. Perhaps we dream about buying a cottage or opening our own business.” 

This type of investing actually goes against “traditional” investment objectives, which tend to revolve around outperforming the stock market. 

“Rather than having conversations about a certain tech company's stock price, or trying to earn the highest return on our portfolio every year or beating the market averages, we're using goals as a more tangible yard stick for measuring our success”, says Viglaski. “As we achieve our goals, we know that we're on the right track.” 

The good news? Women already prefer goal-based investing.  

Setting financial goals can help you feel confident and in control of your future. It can also give you the motivation you need to reach your destination. Whether your goal is to travel, pay off debt or build an emergency fund, having a plan helps you stick to your goals.   

The first step towards goal-based investing is to really think about what you’d like to accomplish in the future and write it down. Studies show that people who put pen to paper and document their goals actually ended up accomplishing significantly more than those who didn’t.

While you’re making your list, it’s important to consider the cost of each goal, and be honest about how long it will take to achieve them.

Each investment bucket represents a certain timeframe needed to reach a goal. The more money you need for a goal, the longer amount of time you’ll need to spend investing.  

Here’s the bucket framework Viglaski likes to follow with her clients: 

Bucket #1: Goals that will be reached within 12 months. This is money that you’re not willing to take any risk with because you’ll need to access it soon, for instance, to buy a car or go on a trip.  

Bucket #2: Goals that will be reached in the next 1 to 3 years.  

Bucket #3: Goals that will be reached in the next 3 to 5 years. You’re able to take on a little more risk with this bucket in hopes of achieving a higher return. 

Bucket #4: Goals that will be reached in the next 5 to 10 years.

Bucket #5: Goals that won’t be achieved for more than 10 years. This bucket usually includes long-term goals, like retirement or money to gift to family members later on. Typically, this bucket can take on the most risk since there’s a lot more time to weather any storms that may come up.

When it comes to taking control of your investment plan, Julie suggests we start by talking to an advisor. A trusted advisor relationship can go a long way in helping you feel understood and secure about your financial future. You don’t have to figure it all out alone.  

Find an advisor who: 

• Keeps your life circumstances and specific challenges in mind and can share examples of similar clients they have helped
• Reviews your current situation and works with you to create a financial plan 
• Understands your values and your feelings about risk 
• Tailors their approach based on your investment knowledge and how you’d like to receive information