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Investing in Your 20s and 30s For Dummies by Eric Tyson

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Chapter 2

Using Investments to Accomplish Your Goals

IN THIS CHAPTER

Investing for short-term consumption goals

Working toward a home purchase

Planning for retirement

Assessing your desire to take risk

Saving and investing money can make you feel good and in control. Ultimately, most folks are investing money to accomplish particular goals. Saving and investing for a car purchase, expenses for higher education, a home purchase, new furniture, or a vacation are typical short-term goals. You can also invest toward longer-term goals, such as retirement decades in the future.

In this chapter, I discuss how you can use investments to accomplish common shorter- and longer-term goals.

Setting and Prioritizing Your Shorter-Term Goals

Unless you earn really big bucks or expect to have a large family inheritance to tap, your personal and financial desires will probably outstrip your resources. Thus, you must prioritize your goals.

One of the biggest mistakes I see people make is rushing into a financial decision without considering what’s really important to them. Because many people get caught up in the responsibilities of their daily lives, they often don’t have time for reflection. Take that time, because people who identify their goals and then work toward them, which often requires changing some habits, are the ones who accomplish their goals.

In this section, I discuss common “shorter-term” financial goals — such as establishing an emergency reserve, making major purchases, owning ...

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