Invest Wisely
Iowa State University Extension Investor Protection Trust


Setting Investment Goals

If you are like many individuals who have a financial dream such as being comfortable in retirement but have no idea how to invest in order to achieve it, take heart.  According to Pat Swanson, CFP® and families specialist with Iowa State University (ISU) Extension’s Invest Wisely Project (, there is a way.

“Individuals spend more time planning a summer vacation than they do setting investment goals,” Swanson says.  “To focus on your dreams, establish specific investment goals.  Then you are more likely to be successful.”

Swanson says to write down your goals.  Putting them on paper reminds you of their significance and can motivate you to do what you need to do to achieve them.  Most individuals have more than one investment goal.  However, Swanson advises not to have so many competing goals that you become discouraged. Also, divide them into short-, medium- or long-term goals.

Short-term goals are those that can be accomplished within the next two to three years.  Having a specific dollar amount for a car in two years is a short-term goal.  Medium-term goals are those that could be accomplished within the next three to ten years, for example, having a fund for a child’s college education.  Long-term goals are those that take more than 10 years to accomplish, for example, having a nest egg to fund retirement.

Swanson also suggests that investment goals should be SMART – specific, measurable, attainable, reviewed, and time-related.  A specific goal is one with dollar amounts and dates established for an identified purpose.  Decide on a regular amount to invest weekly, biweekly, or monthly to accomplish your goals.  Be realistic and establish attainable investment goals given your financial situation.  Review your goals regularly, for example, annually, to see if you are on target or whether revisions need to be made in your investment plan. 

Have a timeline for accomplishing your goals.  For example, suppose you want a retirement nest egg that will yield $1,000 per month to supplement your pension.  If you plan to retire in 20 years, you will need to put $150 a month in investments averaging a 10 percent return to have a $114,000 nest egg at retirement.

“If you don’t know where you are going you can’t choose the right path to get there.  By establishing specific investment goals you have a road map to achieving financial success,” Swanson says.

The ISU Extension Invest Wisely Project provides a series of newspaper, radio, and web resources for investors.  It is funded by a grant from the Investor Protection Trust (IPT).  The IPT is a nonprofit organization devoted to investor education.  Since 1993 the IPT has worked with the States to provide the independent, objective investor education needed by all Americans to make informed investment decisions.


Updated July 25, 2013