You are a Financial Adviser

Being your own financial adviser can be challenging at first. You have to learn where to put your money and how long to leave it there, but after a while, you will get the hang of it and you can be successful as your own financial advisor. Becoming your own financial adviser will help you accomplish your financial goals. To simplify how you can invest without worry here are the four main steps to investing:

  1. Know your financial goals
  2. Link your goals to investment objectives
  3. Find investments that match your goals and objectives
  4. Stay true to your goals and make necessary adjustments
Know Your Financial Goals

Financial goals are the first step in building our investment portfolio and no one else can make your goal better than you can. You must create goals that you can achieve. At a bare minimum include these factors in your financial goals:

  • Purpose (Education, Homeownership, Retirement, Mission)
  • Amount of Money (The desired end dollar amount)
  • Date of Expected Completion
  • Monthly Payment towards Goal
Link Your Goals to Investment Objectives

Investment objectives group investments into categories that help investors with specific goals. Different objectives serve different purposes. We have listed investment objectives and their meanings below:

  • Growth – Long-term growth. Stock market crashes are looked at as investment discounts, not as huge losses. Usually, the time period of this objective is more than 10 years and is more applicable to younger people. This can be achieved through investing in growth stocks, the S&P 500, Nasdaq composite, or other reliable long-term investments.
  • Income – To get a consistent income from your investments. This can be achieved through stocks that pay dividends or bonds that pay interest. Usually retired people have this objective.
  • Capital Preservation – To retain and not lose the money. Usually, this applies to older people who are about to retire or are retired and can’t afford to lose their money. This can be achieved through highly rated bonds or other reliable loans.
  • Tax Management – To limit and suppress taxes as much as possible on the money you gain from your investments. This can be achieved through investing in government investments, like U.S. Treasury or municipal bonds.
  • Speculation – Investing to receive short-term gains. This is the riskiest investment objective and usually represents a small portion of an investor’s portfolio, if any. These investments usually don’t show long-term growth reliability and are very volatile. An example investment would be in penny stocks, stocks that cost less than $1 per share, I would add stocks less than $10 per share.

More about investment objectives on The Balance

Find investments that match your goals and objectives

Different goals will match up with different objectives, but based on the descriptions of the investment objectives you can decide which goals match up for you. You can also have multiple investment objectives for one goal (Tax Management is usually paired up with another goal). Some examples of different goals matched up with investment objectives

  • Retirement more than 10 years from now = Growth objective investments
  • Retirement less than 5 years from now = Start taking money out of growth objective investments and put it in capital preservation objective investments. Depending on how long you plan on living after you retire and how much money you want to pass on to others afterward will help you determine the amount of capital preservation objective investments you will want.
  • Retired = Income and tax management objective investments
  • Saving for a big purchase 10 years down the road or more = Growth objective investments
  • Saving for a big purchase in 5 years or less = Capital Preservation
Stay true to your financial goals and make necessary adjustments

What is a goal worth to you if you don’t stick with it? What is one reason why your financial goals are important to you? Make sure that your financial goals have a purpose for you so that you will want to accomplish them. Knowing you are the biggest factor in your success, do things that will help you succeed: set reminders on your calendar to make payments towards your goals, set up a direct deposit account for your investments, or get friends or family members to hold you accountable.

What would be a necessary adjustment to my financial goal?

Imagine you were saving for retirement and one day you won the lottery and got $5,000,000. Instead of spending this, you can have this go into your retirement account. You change your investment objective from growth to capital preservation. Your days of worrying about retirement are over and you can live your life as it was before. Another example of a necessary adjustment to a financial goal could be a change of heart.

For example, you were saving up to buy a boat in full and one day you woke up. You didn’t want the boat anymore and after a month or so you made it official. You then decide to put the money allocated for the boat into a different financial goal.

One more example, you were saving $500 per month for a good down payment on a $300,000 house in 10 years. One day you find out the house you want would be $350,000 in 10 years instead of $3000,000. You calculate that you would have to save $800 per month and so you would have to adjust your goal to do so.


Anytime you change a financial goal or objective it would be wise to ponder on it for a while and consult with someone close to you. The key to being your own financial adviser is staying true to your financial goals and not letting your emotions get the best of you. Now that you have the tools to be your own financial adviser go and accomplish the task at hand.

Complete your Investment Plan with The Budget Guide

Be Your Own Financial Adviser
Article Name
Be Your Own Financial Adviser
Learn how to be your own financial adviser to accomplish your financial goals. The Budget Guide will walk you through the four key steps to being your own financial adviser.
Publisher Name
The Budget Guide
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Categories: Investing


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