Financial Goals

An investor's financial goal determines his/her expectation on the return of investments. Financial goals are the cornerstone to draft the final financial plan. In general, there are 3 primary and 2 secondary goals:

1. Safety - the presercation of investment capital
2. Income - income generation, to obtain a series of cash flow
3. Growth - the increase of portfolio value primarily from capital gains
4. Liquidity - the marketability of portfolio assets
5. Tax minimization - the desire to minimize tax payments through choices of investment products

Some more tangible goals should also be identified during the review process:

1. Cash flow - how much money you need for now, and your retirement?
2. Time horizon --- how long you expect to keep your money in an investment?
3. Desired rate of return --- what is the expected level of return for different investments?

Life Cycle Analysis

Investor's Life Cycle Analysis is a good approach to determine the financial goals of different individuals based on the financial data collected.