Learning to set investment goals is one of the most important things you can do as a new investor because it helps you keep track of where you have been, where you are, and where you are going as it pertains to your personal finances and your journey to financial independence.

Here are the first 5 questions you need to ask yourself when setting investment goals for financial independence.

1.What is “your number”? 

In order to reach financial independence from your portfolio, how much monthly passive income would it require if you were to withdraw no more than 3 percent to 4 percent of the principal value each year? 
为了从你的投资组合中实现财务独立,如果你每年提取不超过本金价值的3 %到4 %,每月需要多少被动收入?

That is the amount of money it would take if you wanted to live off your capital without having to sell your time to someone else while enjoying your desired standard of living.

2. What is your risk tolerance?

No matter how successful you are or how much money you amass, some people are wired in a way that fluctuations in their portfolio’s market value leads to enormous levels of emotional misery. [/en

[en]They’d rather end up with less money in the future, and enjoy a lower rate of compounding, but have a smoother ride. 


Learning to be honest with yourself about where you fall on that spectrum is a big part of fiscal maturity. For example, though it can put you at a significant disadvantage under most circumstances, you don’t have to own stocks to build wealth. 

3.How do your moral and ethical values influence your portfolio management strategy? 

Do you plan on spending all of your capital during your lifetime or do you desire to leave behind a financial legacy for your heirs and beneficiaries? 

If you spend through your capital, it means you’ll be able to enjoy a higher withdrawal rate than you could support otherwise. 

If you don’t, you’ll get to take a small cut of the stream of passive income from your holdings but the principal should grow over time, provided it is prudently managed, serving as what effectively amounts to an endowment. 

4. Will you limit your investments to your home country or expand globally? 

Despite the uptick in nationalism that has occurred beginning in the year 2016, the forces of globalization are real, they are powerful, and they mean than anyone with access to a brokerage account can become an owner of firms throughout the world.

You can be a teacher in California and watch money come in from your holdings in Canada and France. 

While this introduces additional risks of permanent capital loss, as well as other risks such as currency risk and political risk, it also offers greater diversification and potential exposure to market performance that may turn out to be better on a risk-adjusted basis than that which would have been available from a domestic portfolio alone.

5.What is motivating you to achieve financial independence? 

While some people are natural savers—they tend to accumulate without really needing a reason to do so as they live below their means and don’t really know what to do with the difference—most people are driven by some primary or secondary motivation that causes them to pile up capital. 

It is extraordinarily important that you look within yourself and honestly answer the question, “Why?”. 

Why are you compelled to save? 

What makes you want to invest rather than spending or donating the money that is flowing through your hands? 

Often, by getting to the heart of that question, you can better design your portfolio to achieve whatever it is you are really pursuing.