Your financial goals are simply personal goals that have a cost attached. Not every personal goal is a financial goal, but many personal goals require some money to accomplish. Certain personal goals cannot be accomplished without meeting specific financial targets, such as saving for the down payment on a house, or saving for a child’s education or mission. If you do not calculate and plan for the costs of many of your personal goals, it is likely that you will not be able to accomplish them.

The most important financial-planning document you will prepare, besides your list of personal and family goals, is your investment plan. An investment plan is important because it creates a framework for every investment activity in which you will participate. It states what you will invest in, how you will invest, why you will invest, what percentage of your money you will invest, and so on. In short, your investment plan significantly affects your investment returns. Write this plan well and then follow it carefully.

We have discussed the importance of creating a personal investment plan that can help you effectively achieve your financial goals. Remember that your personal investment plan is your road map to successful investing: it will help you achieve your goals and avoid dangerous get-rich-quick schemes. The following are some final thoughts to consider before you invest:

1. Learn and follow the principles of investing. Avoid taking shortcuts.
2. Make investing an automatic part of your lifestyle. Strive to reach a point where you do not have to think about investing, you just do it.
3. Let others help you save. Take advantage of employee benefits and federal and state tax-advantages. Use tax-deferred and tax-eliminated investment vehicles as much as possible.
4. Institute barriers that limit your access to your savings. The harder it is to liquidate your investments, the less often you will use your investment assets for everyday purchases.
5. Invest bonuses and other money that you receive unexpectedly to help you achieve your financial goals more quickly.

Finally, get-rich-quick schemes are investment methods in which you can supposedly make a lot of money in a short amount of time without having any knowledge or incurring any risk. If a promise seems too good to be true, it usually is. No one can guarantee a consistently high rate of return. Markets are unpredictable and so are returns. “Guaranteed high returns” are typically neither guaranteed nor high. The way to make money in the stock market is the old-fashioned way: investing in a diversified portfolio for many years.

Now that you have completed this section, ask yourself the following questions:

1. Do you understand the importance of financial goals and know how to set them?
2. Do you know how to prepare a personal investment plan and do you understand this plan’s importance?
3. Do you know how to identify and be aware of get-rich-quick schemes?