4 Questions That Should Guide Your Investment Plan

financial advisor reviewing investment plan

Creating an investment plan to get you to your long-term financial goals is an important step in your financial journey. But how can you get started building the investment plan that works for your goals, situation, and lifestyle? There are four critical questions you need to ask yourself to create your own custom investment plan – let’s learn more.


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1. What is my goal?

If you’re interested in creating a solid investment plan for long-term gains, you need to have a clear set of goals in mind before you begin. Are you looking for a plan that gives you a certain amount of income throughout your retirement years? Do you want growth now so your investments can provide you with income later on? Or are you interested in safety via preserving your principal value as your top priority?

Saving for a financially secure and rewarding retirement is the top goal for most people when they invest, especially if they’re over 55. To set an accurate retirement savings goal, you should first look at how much money you anticipate needing to retire comfortably and project any future income or expenses. Then you can create a retirement savings goal that is accurate, so you know what number you need to hit and when you want to have accomplished this goal.

Creating goals isn’t just about listing the dreams you want to achieve in retirement either – though that’s a fun part of the exercise. Get as specific as you can with your goal-setting. How much money do you realistically need? When do you truly want to retire? What income can you count on absolutely, and what will simply be a nice bonus if and when it materializes? Setting concrete goals makes it easier to stick to your plan and measure and celebrate your progress along the way.

2. What is my budget?

Now that you know what you want to achieve, you should start thinking about how much you can contribute towards that goal right now. Do you have one lump sum of money you want to invest immediately, or are you interested in making regular monthly contributions from your current income?

Some investment choices have minimum investment amounts, so getting clear on what you can afford to contribute before committing to any specific investment route. Setting up a regular, automatic investment plan where a monthly sum is transferred from your checking account into your investment account can help you stay on track for your goals without having to remember to make a regular effort.

It’s also important to think about keeping investment costs low, especially if you’re on a lower budget. High costs and fees can easily eat into your investment returns faster than you think, so choosing wisely when you’re selecting investments and financial advice is vital.

3. What is my risk tolerance?

It’s a good general rule of thumb: the younger you are, the more risk tolerance you can have in your investment plan. This is especially true of saving for retirement. After all, if there are big market dips when you still have 30 years to go until retirement, you have plenty of time to correct course and make up those losses. But if you’re heavily invested in stocks or riskier investments with just a few years to go until retirement, those market shifts can be devastating.

Allocating your assets properly will help decrease your risk profile as well – a diversified investment strategy can help protect you from financial catastrophe. Working with a financial advisor firm can help you decide how to take the right risks so you get a good return on your investments while sticking to your preferred risk tolerance level.

Many people also think they need to be actively involved in every aspect of their investments, but that’s time-consuming and intimidating to most people. If you have a lower risk tolerance, you’re better off entrusting your investments to a trusted advisor or firm (be sure to choose a fiduciary, who has a duty to you and not their own profits!) and letting them chart the course towards your goals.

4. What is my timeframe?

Establishing a realistic timeframe for your investment goals is very important. If you’re going to need money for a house down payment in five years or less, you will need a different investment strategy for that money than for your long-term retirement savings. For shorter-term, concrete goals, you’ll have lower risk tolerance since you have a more immediate need for that money. But for long-term investments like saving for retirement when you’re still a decade or more away from it, you can take more risks to accept more growth.

When you’re looking at your investment plan timeline, it’s important to remember that you need a disciplined, long-term plan to succeed. While it’s tempting to try to time the market, it’s not possible to predict what will actually happen. And too much turnover can increase the amount of fees you pay and money you lose. You’re better off sticking to a slow and steady plan you can actually achieve.

Establishing your investment timeline can also help you pinpoint what kind of help you need to in reaching your investment goals. If you want to save for a small, short-term goal and your budget can cover those investments easily, then investing yourself in index-based funds might be fine. But if your situation is more complicated – you’re nearing retirement age, you have complex tax needs, or you’re just not sure how to manage your money – you should look for a financial advisor firm that can meet all of those needs so you can meet your goals.


Before you decide what and where to invest for your future, ask yourself these four critical questions so you know what needs to guide your investment plan. And if you still have questions after this exercise, you’re not alone. Talk to a trusted financial advisory firm to learn more about creating a customized, comprehensive investment plan that works for you and your dreams of the future too.

SGL Financial includes investment planning as part of its comprehensive service offerings. The firm relies on evidence-based, modern theory-driven portfolio management with a sophisticated overlay system that works to ensure that clients’ assets remain balanced and at maximum efficiency. SGL believes in keeping costs low, taxes low, and returns high.

The SGL Financial investment philosophy hinges on the fact that you can’t time the market. It’s an unpredictable entity. Consequently, a successful investment plan requires a disciplined, long-term approach.

SGL prides itself on transparency, offering fee-based services that put clients first. Moreover, the firm provides holistic services, making it a one-stop-shop for planning, investing, retirement, insurance, Medicare, taxes, and legal.

Reach out today for more information.