The Five Goals Of Investing
Can you imagine running a race and not knowing where the finish line is? Is it a 100-meter sprint? A 400-meter race? A marathon?
You would have no idea what type of pace to set, or when you could rest.
Yet, this is one of the problems that people have with investing: there is never a finish line. Most of us invest day-to-day and swing emotionally with the market. We’re happy when the Dow goes higher, and sad (or scared) when the Dow goes lower.
But how the Dow moves should have little effect on our daily emotional state, once we move toward a more holistic approach to investing and once we understand the five goals of investing.
Here are the five goals of investing:
Retirement
The majority of investors are saving their money through their working career so that they can quit when they’re too old to work.
Wealth Creation
If you had a truth serum and asked an investor why she puts money in a stock, she’ll probably tell you: “To get rich.” The secret desire of most investors is to pick a stock the rockets in price–like a WalMart of the 1980’s or a Google of the 2000’s–and makes them rich.
Security
Another set of investors want to make enough money in the market to be safe in case of a financial emergency. Investors who seek safety go beyond the market to place bets on precious metals and commodities.
Fun
Some folks just invest for the fun of it. It’s a hobby, like model railroads and knitting. Investors who trade for fun enjoy the whole process: researching, finding, and monitoring their investments.
Freedom
The final goal of investing is the actual end-game of financial management and has elements of all the other goals. Whether we want wealth, retirement, security, or just amusement, what we actually are seeking is freedom.
Related posts:
- How to Stick to Your Financial Goals
- Wage Slave Freedom: Invest In Yourself
- An Autotrading Egg in Your Basket
- Five Ways College Students Can Start Investing
- Top Investing Mistake #7: Not having a Specific Goal
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
