Preparing for 2024: Why Goals Are Greater Than Resolutions for Investors
There’s nothing more synonymous with a new year than setting resolutions. January’s like a blank slate, and it gives so many of us the motivation needed to make changes or set positive intentions for the months ahead.
But, as you may have discovered from your own experiences, setting resolutions and keeping them are two very different things. January 1st may be a fresh start for many, but old habits are hard to quit — especially if you don’t create systems for keeping yourself accountable.
In fact, by January 19th, 91% of people who set resolutions abandon them.[1] But rather than dwell on defeat, let’s talk about what those other 9% of people are doing right — setting goals, as opposed to resolutions. In particular, setting goals as an investor is incredibly important, as it helps more effectively reassess your portfolio, make strategic changes, and maintain a long-term focus.
Setting SMART Goals as an Investor
If you want to make goals that you’ll stick with over time, one of the most effective methods to use is the SMART goal-setting method.
SMART stands for:
Specific: Make sure your goal is detailed and specific enough to give you a clear visual of what you’re working toward. In terms of finances, this could be a specific income level, paying down a certain amount of debt, or growing your portfolio by a certain percentage.
Measurable: You should be able to measure your goal somehow — in dollar amounts, percentages, etc. In addition, you should be able to measure your progress. People will often set smaller, easier-to-achieve milestones along the way to help maintain motivation and forward progression.
Achievable: Is your goal realistic? Goals should be aspirational, but not completely unattainable. This is something your financial advisor or other financial professional can help you determine.
Relevant: Is this goal important to you and your well-being? In order to maintain motivation and feel accomplished in achieving this goal, it should help better your life in some way.
Timely: Put a timeline on when you’d like to achieve this goal. Creating parameters can help you stay on track and disciplined.
3 Common Investing Goals
Going into 2024, now’s the perfect time to revisit and think about your investing goals for the year ahead. We’ve found that there are three common goals most people want to accomplish with their portfolio — security, income, and growth.
Security
One of the core tenets of investing is that positive returns aren’t guaranteed. However, some investments are certainly considered safer than others. Treasury bonds, for example, are considered one of the safest investments available because they’re backed by the U.S. government.
Cryptocurrency, on the other hand, is considered especially volatile and one of the riskiest investments available because it’s unregulated and prone to cyberattacks (among other factors). For that risk, however, there is the potential for much higher returns than safer options, like bonds (and even stocks).
A diversified portfolio will include investments with varying levels of risk and security. The closer investors get to retirement, however, the more they tend to focus on finding investments that offer greater levels of security (such as bonds or alternative investments, like real estate).
Income
If your goal is to earn more income (without taking on a new job, relying on a promotion, or otherwise increasing your workweek), you must incorporate investments into your portfolio that deliver passive income.
Only relying on income you earn while actively working is limiting, as there are only so many hours in the day and only so much others will pay you for your skillset. That’s why passive income is a major wealth builder.
Growth
Of course, as an investor, you want your money to grow — it’s the reason why you take on risk, as opposed to leaving your cash in a savings account (that accrues little to no interest). Whether you’re looking to buy your dream home, fund a child’s future wedding, or enjoy financial independence with a work-optional lifestyle, you need your money to grow.
Growth is also important for maintaining your purchasing power, which can erode away when inflation rises. That’s why savvy wealth builders opt for investing with a diversified portfolio, which allows them to balance their opportunities for long-term growth while maintaining enough liquid assets to address today’s financial obligations.
Setting Your Investing Intentions for 2024
Security, income, and growth are — not so coincidentally — what we refer to as the triple advantages of self-storage investing.
With a new year here, you’re in a position to make changes and adjustments now that can set your portfolio up for greater outcomes in whatever economic climate 2024 brings us.
Most traditional investments (think stocks and bonds) can help you achieve one, maybe two, of your investment goals. Self-storage facilities, however, offer investment opportunities that can address all three. Not to mention, they’ve proven time and time again to be recession-resistant investment vehicles.
Have you been thinking about diversifying out of the stock market and dipping your toes into the world of alternative investments? Let’s make 2024 your year to say “yes!” with the help of a knowledgeable sponsor like Belrose to guide you along the way.
Reach out to our team today to learn more.
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