Personal Finance – How to Establish Your Financial Goals:
Establishing your financial goals is key to successful real estate investing. Personal Finance – Turning Money Into Wealth (6th Edition) details how to establish your financial goals:
Financial goals cover three time horizons:
(1) short term, (2) intermediate-term, and (3) long term.
Short-Term Goals — include goals which can be accomplished within a one year period, such as buying a television or taking a vacation.
Intermediate Term Goals — may take from one year to 10 years to accomplish, one example is saving for a downpayment on a house.
Long-Term Goals — include goals which take more than 10 years to accumulate the money. Retirement is a common example of a long-term financial goal.
Set Your Financial Goals
To reach your financial goals you must first set them. This process involves (1) writing down your financial goals and attaching costs to them, (2) identifying when the money to accomplish those goals will be needed.
Once you have set your goals, they will become the cornerstone of your personal financial plan, a guide to action, and a benchmark for evaluating effectiveness of the plan.
Over your lifetime your goals will change and you’ll see that a general financial life cycle pattern applies to most people, even you.
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