In personal finance, investing should involve persistence and ample understanding of how money can be put to work and grow. However, it is also equally important to “know yourself” when it comes to putting your money in some form of investment.
Your success in investing will mainly depend on how well you know yourself as an investor. If you think you can’t succeed in investing, you are most probably correct. Only when you know, with conviction, your financial goals will you be able to determine how you will fare in the challenging world of investing.
Your financial goal
Perhaps the best way to determine what and how you plan to achieve financially in the short or long term is by way of employing the SMART approach where S stands for specific,M for measurable, A for achievable, R for realistic and T for time-bound.
Say you want to have P500,000 two years from now to purchase a new car.
Assess this goal:
- The amount is specific, yes.
- The P500,000 is measurable in that you know in yourself, under your circumstances, that you can have P500,000 in two short years.
- Because of this, you are truly determined that this goal is indeed attainable.
- Is it realistic? Under the previous conditions, yes it is.
- Is it time-bound? Of course, as you plan to achieve it in five years.
There you have it, a SMART and practical personal finance and investing for you. It should be as smart and as simple as that.