Material goals are naturally included in the number of personal goals of a person, for the achievement of which he has to make certain efforts. In the conditions of the economic activity of a society, such benchmarks are expressed in monetary equivalent, in the amount of money that is required to acquire material assets. In this case, we are talking about financial goals.
The financial goal is understood as the monetary equivalent of a person's material aspirations, similar to the value of objects for the possession of which he is ready to make efforts. Material goals are usually understood as fairly large acquisitions or cash expenditures. Financial goals, on the other hand, are related to capital growth. Most often material and financial goals are linked.
Purchasing a car or a tourist trip to an exotic country is a material goal. Increasing personal capital for investing in securities or other income-generating assets should be attributed to financial goals.
By terms of implementation, financial goals can be divided into short-term, medium-term and long-term. It takes up to three months to reach the first. The average period for achieving goals is from three months to a year. Those goals that take more than a year to achieve can be attributed to long-term goals. To confidently approach your financial targets, it makes sense to first set goals for the long term, and then break them down into several short-term ones. Short-term goals are easier to achieve, so short-term planning is more effective.
The implementation of financial goals, outlined for the long term, depends on a number of external factors, among which should be noted changes in the legislation and in the economy of the country. Certain negative circumstances may be associated with factors that are compelling. It is very difficult to predict them exactly, but it is possible to provide for them "emergency" means, which include, in particular, insurance.
The procedure for setting a system of financial goals can be considered on the example of purchasing an apartment. To achieve this goal, you will need a certain amount. Let's say that there is a ten-year time frame for the implementation of this financial idea.
First, you need to break the entire period into ten intermediate stages. At the same time, the medium-term goal is manifested as a certain amount of money that must be earned annually. When drawing up a financial plan, it is recommended to take into account the dynamics of prices in the real estate market, expected changes in legislation and forecasts for the inflation rate.
The medium-term financial goal needs to be broken down into a number of short-term goals so that it becomes clear how much you need to earn and set aside once a month or quarter. The indicators of the financial plan must be adjusted upward, that is, take them with a certain margin.
Financial goals are set in the same way when investing in financial markets. In this market segment, setting goals is even more important, as fluctuations in the prices of paper assets can cause large financial losses. Hedging, that is, risk insurance, plays a special role in achieving financial goals. Derivative financial instruments or leverage, if used in transactions, can play the role of insurance in the securities market and when conducting transactions with currencies.
One of the mistakes in financial planning is setting many goals at the same time. With an excess of landmarks, it becomes difficult to manage the progress of scheduled tasks. It is recommended that you set no more than three financial goals for yourself. Upon reaching one block of goals, you can set next tasks.
