Business, Finance, Technology

4 steps to creating your plan

1. Set specific and realistic goals

For example, instead of saying you want to have enough money to retire comfortably, think about how much money you’ll need. Your specific goal may be to save $500,000 by the time you’re 65.

2. Calculate how much you need to save each month

If you need to save $500,000 by the time you’re 65, how much will you need to save each month? Decide if that’s a realistic amount for you to set aside each month. If not, you may need to adjust your goals.

3. Choose your investment strategy

If you’re saving for long-term goals, you might choose more aggressive, higher-risk investments. If your goals are short term, you might choose lower-risk, conservative investments. Or you might want to take a more balanced approach.

4. Develop an investment policy statement

Create an investment policy statement to guide your investment decisions. If you have an adviser, your investment policy statement will outline the rules you want your adviser to follow for your portfolio.

Your investment policy statement should:

  • specify your investment goals and objectives,
  • describe the strategies that will help you meet your objectives,
  • describe your return expectations and time horizon,
  • include detailed information about how much risk you’re willing to take,
  • include guidelines on the types of investments that make up your portfolio, and how accessible your money needs to be, and
  • specify how your portfolio will be monitored, and when or why it should be rebalanced
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