Your Investment Goal
To construct a wining investment portfolio, the first step is to identify your investment goals and set up your finical objectives. Let’s begin this rewarding journey. In this chapter, we review investment goals and their proper components
 
Investment Goal Examples

The followings are some examples of your financial goals;
- Save to retire by age 65 with $500,000 in your account.
- Save for your MBA and graduate school tuition.
- Invest to pay for $25,000 down payment to purchase first home or upgrade to a better one.
- Invest to pay for your dream car.

All investment goals could be categorized mainly in three different scenarios;
 
Scenario 1- To reach your financial goal by saving regularly like making monthly payment toward your investment account and portfolio. Suppose you wish to save $20,000 in the next four years. Your monthly savings would depend on how much return you expect to get from your investment and how much you could afford to save per month, as an example.

Scenario 2 - You may have some initial capital and fund now and wish to invest it in different financial assets and instruments to reach your goal. Conversely, the second scenario deals with means and methods to reach your goals by utilizing your initial fund and capital. For this type of scenario, we do the following steps.

Suppose you have $10,000 at hand and would like to see it to grow to $25,00 in five years. In other words, you’re looking to make $15,000 appreciation on you’re your $10,000 initial equity. Therefore $25,000 - $10,000 = $15,000. Now you should see you could obtain $15,000 in the next five years as an example.

$25,000/$10,000 = 25% return for five years, therefore, 25%/5 give you about 5% per year. In this case, you could invest your account in portfolio which consist of only risk free T-Bills @5%.

Scenario 3 - You have some initial capital and willing to invest some money regularly into your investment portfolio This is really combination of scenarios 1 and 2.

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