Identify your financial goals
So if you wish to be a good investor, first identify your financial goals. The following list of normal financial goals helps you to identify your own financial goals.
Buying a residential house
Buy a car
Basic Education of your children
Higher education of your children
Marriage of your children
Look after your parents
Your own retirement
Buying land and other assets
The abovementioned financial goals are a few standard financial goals. You can modify these or can identify your own financial goals.
Decide the time period for each financial goal.
After identifying your financial goals you have to classify your financial goals as per the time period it should completed.
Short term financial goals: The financial goals which should be attained within a short period of time such as one or two years can group in to this category.
Medium term financial goals: The financial goals which should complete within 2 to 5 years can classify in this category.
Long term financial goals: Your financial goals which should attain only after 5 years can include in this category.
All these classifications may differ from person to person. For example if your children are infants you can include the financial goal of the marriage of children in long term category. But if your children are near to marriageable age you should classify the marriage of children in short term financial goals or medium term financial goals as the case may be. You can plan your investments and risk bearing capacity as per the time period of the financial goals.
Fix priorities of your financial goals.
After identifying and classifying your financial goals you have to fix priorities in your financial goals. For example you can fix first priority of the education of your child and can give second priority for the marriage of your child. Likewise you have to fix the priorities of each your financial goals. This will help you to plan your investments.
Calculate the expected fund for your financial goals
Once you set your financial goals, you have to calculate the money which should involve in each financial goal. While calculating the money factor you should consider the inflation also. If not, you may not have enough money when you have to reach your financial goals.
Do your homework and complete the abovementioned steps to become a useful and successful investor. If you have a goal you can find the way to reach that goal.
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