Short Term Goals often perish in the hands of long term goals. Do you have some short term goals that you want to achieve? Say, buying a house or an international vacation. Even though the investment horizon is short, we will try to help you attain it.
Get in the car and buckle up if you have something to achieve in the next few years. We all save for our retirement, child’s education, and their marriage. There are other goals too, which may not carry the same value, but ought to be achieved.
Even though these goals are not that valuable, but you don’t want to fall into debt to achieve these. So in this article, we will discuss how to conquer these short term goals using some simple investing techniques. So let’s get going.
We all have goals to fulfill, some of which are long term, and the rest are short term. We carefully plan for our long term goals so that each of our decision is in alignment with them. However, how many of you plan for short term goals? In my POV, most people fail to do it religiously.
I can see that you bet to differ. You do care about your short term goals and want to find out ways to achieve them. Banks will never help us with it because the rates they offer are set-off by constant inflation and we end up getting nothing from the money kept with them.
What are the Options to achieve Short Term Goals
The only way we can achieve our desired returns is with the help of stocks. Stocks are capable of giving us high returns but also come with high risk. To dilute the peril, we have to invest in bonds too at the same time. It will negate the impact of bad returns on stocks.
We can allocate our funds in both of them (say 60% in stocks and 40% in bonds) according to our risk-taking abilities and also how the market is expected to behave. You can invest funds with the viewpoint of long term returns but in case of any emergency change the proportion to adjust accordingly.
Investing in Mutual Funds
Mutual Funds are one of the safer options available in the market. They utilize our funds to build a portfolio which consists of both stocks and bonds. You get an opportunity to choose funds for your short term goals individually.
In case of extra savings, you can choose to invest it in the fund or keep it safe with you. If you want to know more about mutual funds, read our article on Mutual Funds – An Introduction to get an insight.
Invest in ETFs
You may discard of the idea of Mutual Fund as you don’t find it lucrative enough. In that case, you can invest in ETFs or Exchange Traded Funds. ETFs is a collection of securities that emulate the behavior of any particular index, like SPDR S&P 500 ETF which mimics the S&P 500 Index.
Like in case of Mutual Funds, ETFs also give you an option to choose stocks, bonds, commodities or a mix of these. So you get the opportunity to hedge your risk by diversifying your portfolio.
Invest in a short term goal at a time
It is a flaw with humans that we are unable to concentrate on multiple things at a time. Hence if we give ourselves too many goals simultaneously, we won’t be able to achieve any eventually.
So concentrate on a single goal and work towards it tirelessly. It will give you a better chance to achieve the goal. Also, being short term ones, your mind won’t have to wait too long to shift its focus.
Once you have zeroed on to your next goal, make sure you are not distracted. Focus solely on attaining it and only shift your focus once you have achieved it.
Invest with Betterment
Financial Advisors like Betterment makes attaining goals much more comfortable. Before you start investing, they will ask you the purpose of your investment (buying a home, paying fees, emergency fund, retirement, or other) and will design your investment portfolio keeping it in mind.
For the short term, they allow you to allocate funds based on goals. You can segregate these goals and invest in either of the funds or all of them simultaneously.
And it’s your turn now to achieve your Short Term Goals
We can give you hundreds of ideas, but it is you who have got to achieve your goals. So gear up and work towards attaining all of them one by one.
Don’t forget to let us know how you achieved it and best of Luck for your future endeavors.