The Dream Team Investment 2

Planning To Kick Your Investment

Goals

Planning to kick your investment goals is similar to how an AFL team would plan their goals for the season and beyond. There are only a handful of teams out there right now that would actually have the realistic goal of going for the Premiership this season, despite what they might say to the media.

Despite the fact that there are 18 teams that make up the competition, each team is at a different stage, with arguably different goals.

Some teams are full of lists of very young players, some teams have a list with older players, and some teams may have that perfect match of experience and youth.

To help you set your goals we have provided the 4 things an investor must consider before setting their goals.

  • 1. What Is The Duration Of The Investment
  • 2. How Much To Invest
  • 3. Where Is That Money Going To Be Invested?
  • 4. What Is My Level Of Understanding?
1. What Is The Duration Of The Investment

• How long am I going to have that money invested for?

• What’s my investment time frame?

An AFL team internally would have various short and long term goals, just like any great investment portfolio does. It's very important to have a long term goal, a medium term goal, and a short term goal when it comes to investing. Starting with your long term goals can help the medium term and the short term come together, so let’s get started with the long term.

Long Term

• Should be looking beyond 5 years.

For an AFL team, their long-term goal might be “to win a Premiership in the next seven years”.

Your investing goals might be to accumulate $4 million dollars for retirement.

Medium Term

• Should be looking 12 months to 5 years.

For an AFL team their medium-term might be “aim to play finals this year to get some experience for the following year.”

A medium term goal could be to generate $100,000 cash to start a new investment fund.

Short Term

• Today to 12 months.

For an AFL team a short-term goal might be “in the game this week, we want to make sure we don't concede more than 100 points”.

Your investing goal might be to research one new investment alternative.

When setting these goals you need to be careful they’re achievable and not unrealistic. For example, an unrealistic goal would be wanting to make a billion dollars within a week of investing only in cash.

When building your goals you must consider these things first:
2. How Much To Invest

• How much is your investment going to be?

• Is it going to be $5 or $500,000?

• Uncover your available cash, and other liquid assets to find your minimum and maximum investment amounts.

3. Where Is That Money Going To Be Invested?

• Am I just going to keep it in cash?

• Is it going to be in shares?

• Is it going to be in property?

• A combination of all three?

• What is my investor personality?

4. What Is My Level Of Understanding?

• How much do I know about investing in the markets within these asset classes?

• Do I understand the risk vs reward trade off?

Once you have a good understanding of the questions above then you can set your investment goals to be realistic. This not only means you’ll have a better chance of hitting these targets it also means you’re much more likely to stay the course with your investment portfolio long term.

You must ensure that you have a good understanding of every area that your money has been invested and a sound knowledge of the working markets where your money has been seeded.

The advice contained in this document is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a qualified financial adviser.