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Financial Goal Setting: What are the Key Questions to Ask and Do You Take the Fast or Slow Lane to Get There?

Article By Brett Moxey | | Financial Planning

Life is full of choices and your investments and financial strategies are no exception. 

To have a successful personal financial plan that sets you up for the future requires you to set financial goals and, while this may sound simple, few Australians do it properly. 

Financial goal setting requires a healthy blend of realism and future-gazing. 

Financial goal setting: what are the key questions to ask? 

So how can you be realistic yet represent the many aspects of your life (particularly the financial circumstances) required to allow you to fulfil them? 

Start by asking a few key questions about your financial goals. These should include questions like: 

  • What age would you like to retire?
  • Do you wish to retire fully or reduce to part-time roles and continue working in some sort of capacity?
  • What would you like to do in retirement? Travel? Relocate closer to the family? Make a sea change or even retire abroad?
  • What would you like to achieve financially in the next 3, 5 and 10 years?
  • How do you envisage your career path?
  • If self-employed, what’s your succession or exit plan from your business? 

Importantly, how long you work doesn’t need to be dictated entirely by your level of assets. 

Some clients of mine could have retired much earlier but are still working in their 70s and one even in their early 80s. They are still working because they enjoy the social and mental engagement it provides. 

Reaching financial goals: take the fast lane or slow lane? 

Okay, so it’s all well and good having a set of financial goals. The real question is how do you go about achieving them? 

Once you know what you’re targeting in terms of financial and other lifestyle goals, you can then start planning the route to get there. 

During my time as an adviser, I have often likened the ‘how to get there?’ question to a journey to the Gold Coast. 

If you had plenty of time (long investment horizon), a reliable car (steady income), and a full tank of petrol (substantial investments and superannuation) more travel options would be available to you. 

You could simply drive in the slow lane all the way, not overtaking or driving aggressively. You will arrive at your desired destination on time, if not early. 

On the other hand, if you are not in the same position with one or more of these items (time, car, petrol), you probably need to be in the faster lane and ensure that you are keeping up with the speed limit. 

Only then will you arrive on time. 

Balance your risk when pursing financial goals 

The key to setting your strategy is this: don’t adopt too much or too little risk. Either may prevent you getting to your desired financial destination on time. 

It is easy to get side-tracked and end up in a place you thought would be a short cut to success but produced a disastrous result. 

Have a plan, understand which lane you are best driving in, and stick to it without getting side-tracked. 

Contact an Altitude Adviser so we can provide clarity and an objective view to keep you in the most suitable lane at all times as you pursue your financial goals.

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