The journey of getting financial independence starts from making investment goals. Every investor should have specific objectives that help them monitor where they are and where they are headed. You investment goals should be measurable and definite. For instance, you can set a target of how much you wish to achieve every week to help you evaluate your finances.
Come up with reasonable goals that you can achieve without straining too much. Set a certain amount of money you wish to earn through investing at the end of the year. Having a target for yourself will push you to work harder to achieve. Do not set too high expectations that are unrealistic and impractical. Your investment goals should also be in line with your long-term objectives.
Use money as a commodity to improve your life and give you satisfaction. It is advisable to have a low rate of saving so that you can balance your short-term wants and long-term desires for you to enjoy life. As you set investment goals for your financial independence, you need to consider some crucial factors.
Assess your risk tolerance. We all have different endurance levels. You should be honest with yourself as you try to understand how fluctuations in your portfolio may influence you as an individual. You can build wealth in other ways apart from owning individual stocks.
Ethical and moral values can also affect how you manage your portfolio. For instance, some people are not comfortable with owning things like tobacco shares or alcohol distilleries. You should decide which investments you are comfortable with according to your values to help you generate income and which go against your ethical values.
Some people plan on spending their capital on their own while others leave a financial legacy for their beneficiaries. You need to establish which option is important to you and use your money wisely. Spending through your capital means a higher rate of withdrawal compared to someone wanting to leave some for their children. You can even consider establishing a trust fund.
You should also have in mind the possibility of expanding your investment globally. Though expanding your investment comes with additional risks, you should think about its benefits such as diversification. Expanding your investment can also expose you to bigger markets which can help you gain financial freedom faster than limiting yourself to your home country.
The asset class you choose should also coincide with your temperament and personality. Not everybody can manage all asset classes. Venturing in real estate business, for instance, needs perseverance and a lot of commitment compared to an asset class such as money lending. You must also be willing to incur some costs while investing in real estate.
Think about if you can manage your portfolio alone or need assistance from others. You must be true to yourself and not try to prove to know it all so that you can get what you want from the portfolio. Feel free to hire a financial advisor from a company.