Reaching Your Goals

After you start investing, monitor your progress to ensure that you’re on track. Make the anniversary of your first investment your day of financial reckoning (or at least that month). When the day arrives, sit down and take an earnest look at what you’re investing in, how much you’re investing, whether or not your goals have shifted or changed completely, and whether or not you’re saving enough (and earning enough on your investments) to reach your goals. The ultimate measure of your portfolio isn’t whether or not you’re beating the benchmarks. It’s whether or not you’re reaching your goals. Are you? For example, if you determined at the outset that you needed to invest $500 a month and earn an average annual return of 9%, are you hitting your goal?
If you’re meeting or beating your goals, you’re in great shape. If you’re not, identify what’s wrong. Maybe you’re not investing enough. You may have to pay off some bills so that you can find more money in your household budget to invest. Or you may find that your 401(k) needs greater funding so you have to increase the percentage of your pay you contribute each week or month.
To ensure that your investment plan is a workhorse that’s pulling its weight, feed it. As you get raises at work, or come into “found” money — maybe a small inheritance, a bonus at work, or a tax refund — consider investing some or even all of these funds in your portfolio.