Thinking Long-Term

It can often be enticing to set out into the investing world with your financial advisor, but it always helps to make sure you have a destination before you begin. Investing isn’t a sprint—it’s a marathon. Thinking long-term about your finances and your goals can help set you on the right path to achieving those set goals, ultimately resulting in a happy, healthy, and secure retirement. Here are 3 long-term questions you should be contemplating right now:

1.       Are you prepared for the long run?

When determining your course, one long-term financial goal that is imperative is to ensure that you have enough money to last through your life expectancy. The lifespan of the average person in the US has increased by over 10 years in the past 60 years. Odds are, you’re going to live a long time, and it is just as important to ensure that you have enough money to survive should you live to 90, 95, or 100+ years old. This is a priority long-term goal that should be discussed with your financial advisor when deciding how to invest. A financial plan could be extremely beneficial in this area to help get a better grasp of how much money you need to save, as well as how/where to invest the money to reach this long-term financial goal.

2.       Are you incorporating inflation into your calculations?

Inflation has been quite the topic the past few months, as it has been rising at a rather fast pace. The FED has assured that it is simply “transitory”, and it will not last, but that does not mean that inflation should not factor into your long-term plan. When deciding how much money you’ll need when you retire, it is vital to incorporate inflation into those calculations. If you think you would need $20,000 a year to live on when you retire, you might have to look 15-20 years down the road and realize that the number might be somewhere closer to $30,000 or more.

3.       How much do you want to leave to your children/charity?

Determining how much money you want to leave to loved ones or a charity is a long-term goal that is essential to how you invest your money. After calculating and preparing for a long life and the amount of income a year you’ll need to live on, having a sense of how much money you want to leave to your loved ones is an important step and a necessary one that can often be overlooked.

Begin to think long-term with your investing, setting some goals while also preparing for potential obstacles. These 3 questions are a good place to help you start thinking long-term with your investing.

Tip: A financial plan could be extremely useful with long-term investing and answering these 3 questions