Setting Goals & Time Horizons

How to turn vague wishes into investing goals, why the time until you need the money decides how much risk you can take, and what real market drops teach about horizons.

Start with the why

Before choosing a single fund, decide what the money is for. “Get rich” is not a plan. “Have $40,000 for a home down payment in six years” is. A clear goal tells you how much to save, how long you have and how much risk makes sense.

Good goals are specific, measurable and dated. Write each one down with a target amount and a target year.

Unlock all of Investing School

The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.