|1.||Know what you're investing for.|
|>||Identify Your Goals|
|>||Prioritize Your Goals|
|>||Put a Date on Achieving Each Goal|
|2.||Make paying yourself a priority.|
|3.||Make tax-smart investments.|
|4.||Diversify your portfolio.|
By contrast, if you're investing for a short-term goal, such as a dream vacation next year, you'll have to set aside almost the whole amount, counting on very little help from the growth of your earnings. No matter what you're investing for, starting sooner is always better.
When you need your money also affects what type of investments you should choose. Knowing how many years you have to reach your goal will help you select an appropriate asset mix for your portfolio.
Next: Portfolio Remodel