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4 Stories, 1 Goal – Did You Have a Goal in Mind When You Invested?

As part of the wider 4 Stories, 1 Goal series, we’re taking a look at some of the key questions that our guests answered on investing for later life. 4 Stories, 1 Goal is a free series designed to get people thinking about their financial future – with insights from property investors and industry experts. You can get your free 4 Stories, 1 Goal series here.

Speak to any investor and you’re likely to be told about the importance of setting goals. Having a clear goal in mind when thinking about investing, particularly investing in property, is vital for driving informed decisions. With a set goal, you can start thinking about strategy and how to achieve these objectives. With a strategy, you can start considering the finer details of the investment.

Depending on your age, financial situation and investment knowledge, chances are you’ll have very different goals to other investors. We asked our four guests about common goals they see in the industry and if they’ve invested personally, what their main goal was.

For Maria as a first-time investor, her goal is expanding on her initial investment to create a portfolio:

“My ultimate goal, not thinking too much about age but in a few years time, maybe by the time I’m 50, is looking at where I would like to be with this portfolio. Obviously, the regulations are constantly changing but all being well and with a bit more saving, by the time I’m 50 I’d have a portfolio, a minimum of five properties I’d say. It’s doable but its thinking about ‘where do I actually want these investments to be? Should I be creating a diverse portfolio to split the risk?

“It’s the unknown at the moment but if all goes as planned, it’s thinking about where I’d set the next one. Do I want to go down the new build route again? Do I want to look at going slightly further out, purchasing something that might attract a family as opposed to a single professional? Ask me this time in six months.”

During his time as a property professional, Raj has worked with a number of clients with differing goals:

“Some investors have, in terms of goals, either a goal to get the best yield, best capital appreciation (or) the best type of tenant. Some people buy more with emotion so it may be a property they would like to live in themselves.

“We do find that investors’ goals do change over time as they go through the investment journey. A lot of the time they might think they want to buy a flat but then it becomes a house, or they have a certain budget and then they decide they can stretch that budget. It might be down to the area, they might be looking at one area and then invest in another.

“We also get people that have a certain financial goal and then we have some people that are not clear at all on what their goal is and they want advice from us. We then give them that advice and it could be whether they split their money into buying two properties or three, or whether they mortgage or whether they should focus on capital appreciation or rental yield.”

Similarly, as a financial advisor, Laura has experienced clients who have goals and those who don’t:

“People don’t tend to have specific goals in mind and if they do they tend to be unrealistic. What my job is to do is to talk to people about what they want to do in five years time, ten years time and 25 years time and then we start to break it down into more reasonable objectives rather than wider lifetime goals.

“Unrealistic goals tend to be when they have inflated views of the income that their asset base can produce once they step away from work. A more realistic goal is when we look at the lifestyle they want and break it down into whats the amount of money you need and what’s the lifestyle you want and marry the two together. We build a more realistic picture of what life can look like during retirement.

“Clients objectives and goals change all the time as life happens and it’s important that any financial plan or investment plan that’s put in place is flexible because you can’t plan for everything and it’s really important that your wider financial circumstances are flexible to meet those changing goals and objectives.”

Finally, as someone who started investing young and has continued to build a wide portfolio, Andy believes goals are closely tied with age:

“Well, I think it comes with age. When I was in my early twenties, I knew I wanted to start investing and I bought a property. The reason I bought a property was that my friend bought one and we all talked about it and it sounded like a good idea. But the driver was to create wealth. In your 20s you want to create wealth, you have ambitions and aspirations of making money and getting on the ladder. So the driver, why did I buy this house, was because I wanted to make money. I didn’t actually know what for at that point but I just wanted to do it and then through that, you learn what’s good. The first property I bought was a fantastic success and so then, I bought as many as I could.

“When you then get older and come into your 30s, you then start thinking about getting serious, maybe your married or thinking of starting a family so your drivers change of why you want to make money and how you’re going to invest. Then again, when you get older, in your 40s or 50s, you go through a different change. Now you’re thinking about passive income. Before you just wanted to create wealth and have a nice house and provide for your family but later on you’re starting to think, when am I going to finish work? What am I going to do when I retire and what does that look like? How can I get passive income where I don’t have to go to work or rely on a pension but this money is going to come to me every month, sustainably for life? So your thought process changes about how and why you want to invest.

“I think the goalposts change for most people as you go along. As I say, when you’re in your 20s you want to earn money, you’ve got dreams and ambitions. You might want a posh car or a big house and then when you settle down you want to protect your family and have a good life for your family and then as you get older, you start thinking about retirement. I think everyone is the same, you go through these stages where different priorities come into play.”

This idea of goals changing over time is vital to remember whether you’re just starting out or building on what you already have. You’ll want to remember that as your circumstances change, so will your objectives. Ensuring you have a flexible strategy to meet these changing circumstances will help you stay ahead of the market and build success.

You can learn more about securing your financial future in our new series, ‘4 Stories, 1 Goal.’ You can download the entire series for free here.

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