4 steps to set your financial goals

Morningstar's Christine Benz calls Goals the foundation of every proper investment plan

Christine Benz 10 May, 2019 | 5:00PM

“Goals-based what?”

That was my response when I when I first heard the now-ubiquitous term “goals-based investing” several years ago. Isn’t all investing “goals-based”? And if people aren’t investing with goals in mind, what are they doing?

It’s obvious that goals should underpin all the investing we do. But too often, investors operate with an amorphous goal of "amassing wealth" rather than thinking through the specifics of what they'd like to accomplish. Without clearly articulated goals, it's impossible to know how much you should be saving and investing, or how long you’ll need to do so. Nor can you know whether a specific goal is even achievable alongside other goals you might set. While buying a vacation house might be part of your vision for a financially well-off you, saving for it should necessarily play second fiddle to make-or-break goals like building an emergency fund or building up your retirement nest egg.

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About Author

Christine Benz

Christine Benz  Christine Benz is Morningstar's director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

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