Back to the Basics: Goals-Based Investing

In April 2015, Back to the Basics, Investment Management, Steward Articles by Adam Cufr

It’s very likely that you have more than one investment account. Maybe you have a few IRAs, a joint account, a 401(k), and maybe a trust account as well. Have you ever asked yourself what the purpose, or goal, is for each account? Do you know exactly what you expect each individual account to do for you?

You may have heard me ask similar questions at some point – goals are very important to effective planning. In fact, much of what we do in the retirement income planning process is connecting specific accounts to specific timeframes in your retirement. If you’re familiar with the bucketing income strategy we use, it’s just that, assigning enough money to each bucket to supply a predetermined amount of money for each season of your retirement. Each bucket, therefore, has a goal attached to it. It’s a really gratifying, clarifying, and effective process.

But if you’re not yet retired, or if you’re fortunate enough to have more money than is needed to supply you with a lifetime income during retirement, how will you handle the investment accounts that are not earmarked for income during retirement?

Most people choose to have these accounts invested in risk-based investments, that is, ‘in the market.’ While doing so, the amount of risk to take has been a challenge to determine, a bit art and a bit science, no doubt. With software-supported goals-based investing, we now have the opportunity to become much clearer about the type of investments to choose for each account.

Thanks to technology, we can now apply a very specific set of parameters to each investment account to align the appropriate amount of risk with the account’s timeframe. For example, an account with a ‘goal’ of being available in two weeks for the purchase of a new car should have a radically different portfolio of investments than an account that may remain invested for 30 years before being passed on to grandchildren. Technology now allows us to pair investments with goals in a much more specific and sophisticated way.

As you consider your investment accounts, can you say with certainty that you have the right investments in each account, to accomplish specific goals you have for yourself?

We look forward to walking you through a process of fine-tuning your investments by helping you clarify your goals and pairing those goals with appropriate investments. Contact us today for a closer look into this process; make your money work for you and your goals, rather than allowing money to be the goal.


Adam Cufr, RICP® (Retirement Income Certified Professional®) is a financial advisor and founding principal of Fourth Dimension Financial Group, LLC providing personal finance and retirement planning services. Adam is a Columnist for Retirement Advisor Magazine. He is also a sought-after media commentator and thought leader. Adam was named one of The 20 Most Creative People In Insurance in 2015 and is a columnist for Retirement Advisor Magazine and the author of Off the Record – Secrets to Building a Successful Retirement and a Lasting Legacy.

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