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How Setting Lifestyle Goals Impact your Finances

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At Magenta we have always said that money of itself is not important – it is what it can do to enrich our lives and enable us to achieve our heart’s desires, that is its great value.

Although Magenta is mainly concerned with financial planning and personal investments, there is much more to it than that. We can’t focus on money in isolation, without thinking about what else is important in our lives.

Before we can think of how we are going to manage and invest our money, we must first determine what we want it to do for us and what our life goals are going to cost.

This exercise will determine how much we need to invest, what it needs to grow by and also how much risk we need to take. For example if we want to be world travellers in our retirement, taking expensive holidays and seeking memorable adventures, it is likely that we will need to invest more money at a greater rate of return than someone who has more modest goals and wants to stay at home with their cats.

This is why it is so important to think ahead about what we want to do. It makes no sense to take too much risk with our money if our future goals will not need big funding. On the other hand, we don’t want to run out of money and be unable to live our desired lifestyle because we invested too cautiously and didn’t achieve the growth we needed to afford our plans.

Many people are unclear about their life and financial goals and a challenging discussion with a good financial planner will help them to clarify their thinking and organise their priorities.

At Magenta we will help you to:

  1. Determine your short, medium and long term goals
  2. Estimate how much these will cost
  3. Prioritise your goals in order of personal importance
  4. Work out the time frame for saving
  5. Calculate how much you’ll need to save per month to achieve your goals. (Don’t be discouraged if the amount is overwhelming. The important thing is to have a set of tangible financial goals to work toward.)
  6. Regularly review your progress towards each goal.
  7. Make adjustments along the way if things change, to ensure you stay on track.

But investment is not all about money. There are other non-financial investments to focus on, which can provide great returns, so we can look back on our lives and feel that we have had a good time.

Our top 3 non- financial goals are:

  1. Fitness – physical and mental wellbeing
  2. Diet – eat real and healthy food not processed rubbish
  3. Sleep – for refreshment and energy. Get a good bed!

It may be necessary to spend money on a personal trainer; organic food and a new bed, but we are confident that these smaller purchases will provide more valuable returns than traditional financial investments in the long term.