Plan Your Prosperity: The Only Retirement Guide You'll Ever Need, Starting Now--Whether You're 22, 52 or 82

Your Investing Goals, Simply

In my view, for most individual investors, your high-level goals can be expressed very simply. When you boil it down for the vast majority of individual investors, they typically have one of the following four goals:

1. Growth

2. Cash flow

3. A combination of growth and cash flow

4. Capital preservation (but this is misunderstood and often inappropriate for many investors)

Straightforward. Simple! Again, that doesn’t mean achieving them is simple. But by determining what your goals are, you’re one big step down the road of building an appropriate retirement investing plan. That’s perhaps your most important job as an investor: Clearly define reasonable goals, then determine periodically if the road you’re on can get there.

We’ll go over these goals more in later chapters to help you better understand what’s reasonable to expect, whether your current portfolio size and current savings plan are sufficient and, perhaps more important, how to make sure your plan (whether you devise it or someone else does) increases the likelihood you achieve your goals. But let’s briefly review each goal.

Growth

Growth is growth. Seems easy—growth! You have something now; later, you have more. But how much growth is appropriate for your objectives and needs?

For example, equity-like growth might be appropriate for your goals. (We talk more about what’s reasonable to expect from equities in Chapter 5. It’s critical to consider what’s reasonable because con artists ...