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Investment Goals Planning

The first step before you embark on any investment activities is the setting of investment goals. You may find it difficult to harmonize your goals since some of them may conflict each other or may not coincide with your way of life.

The setting of investment goals includes the determination of a time period within which you are going to achieve the end result. This is required in order to make a clear view of what type of investment tools you should use for the achievement of your financial goals.

Some people put as long-term goals the acquisition of money for the financing of their retirement years or the education of their children. Other goals that may be followed are the purchase of a home. Additionally, many investors decide on the allocation of resources for the purposes of meeting emergency needs.

You should clearly prioritize your financial goals. Therefore, the provision of money for college education should come before retirement planning, because it will happen in the nearer future. Also, you should start allocating money for college education at an early point and not wait until the time has come to pay tuition fees.

Since most of the employers offer their employees retirement plans, you should take full advantage of these. Some of the employers even offer matching of contributions from which you should take benefit since your money will greatly increase.

Investing for retirement is also very important and should not be overlooked. So, you probably face the dilemma which comes first, since both plans require regular contributions.

In order to make a clearer view of your financial priorities think of the available education financing alternatives, such as:

Financial aid
Student loans
Student work possibilities
Scholarships, grants, bursaries and etc.

These alternatives' availability should facilitate your calculations for the money you will need to allocate to the education account.

You should also keep in mind that as you approach the time to pay for college tuition, you should apply a more conservative investment style. This means that, knowing the date when your child will enter a university program, you should start removing the money from your stocks five years before the date comes. The investment tools that are recommended in such cases are bonds, bank CDs or other types of savings.

However, you should not forget about your retirement plan during the time you allocate money for the education needs of your children. Try to allocate as much as your resources allow you during the time you invest for your children's education.

Analyze your spending habits in order to increase your chances for achieving both of your financial goals. Try to avoid compulsive spending and always consider the impact of a particular purchase, which requires more money, on your financial goals. By cutting on unnecessary expenditures you will be able to quicker achieve your financial goals.

Finally, get used to the thought that you will encounter conflicts between your financial goals. Thus, you should prioritize and try to allocate money in the most efficient way so that you achieve all of your financial goals.

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