New Year Resolution: Strengthen Your Basic Investment Skills To Achieve Your Retirement Goals Faster


Investment calls for perseverance and determination – haste brings no success. Comprehensive financial planning that covers the needs in different stages of life helps mitigate unexpected investment risks and avoid any crises that may arise as your retirement approaches.

Upon the start of a new year, take a chance to evaluate your financial condition and that of your family, in order to tailor more specific financial goals for your future and your retirement.

Six steps to financial planning for a hassle-free retirement

Financial planning is a process of setting, planning, executing and reviewing life goals through proper financial management. It also involves the management of existing and future wealth. A comprehensive financial plan should take care of various yet intimately-related aspects of life, including investment, daily expenses, savings for retirement, purchasing the right insurance policies and estate arrangements.

Step 1: Evaluate your financial condition

Your first and foremost task is to carefully review your current financial condition. List out all your assets, including your salary, bank savings, stock or fund investments and insurance policies, as well as your liabilities, such as mortgages, car loans and any other outstanding debts.

Step 2: Formulate your budget

How do your weekly and monthly money inflow/outflow look like? Work out a detailed segmentation of your incomes (i.e. your salary, pension and benefits), your expenses (i.e. your mortgage repayments, other personal loans, cash advances and outstanding credit card balances) as well as your expected savings. Prioritize them by needs and preferences.

Step 3: Set your financial goals

Set short-, medium- and long-term financial goals to cater your plans in different stages of life. More common financial goals may include saving up for vacation, studies, getting married, buying an apartment, paying off debts or retirement. Make a list of all your needs and goals, formulate an investment schedule, then focus on managing your daily expenses. Take small steps along the way until you reach your smaller and bigger goals.

Step 4: Know your risk tolerance and structure the right asset allocation

Risk is the variable that accounts for the discrepancy between investment expectation and reality. Investments with high potential returns are often associated with higher risks. Ask yourself: if 20% of your investment value vanishes overnight, can you take it?

Generally speaking, stocks bear greater volatility than bonds. Therefore, as you determine how much assets you allocate to stocks, bonds and other classes in your portfolio, you are also determining how much risk you are taking.

Step 5: Establish an emergency fund

If you are not financially prepared for emergencies, any unexpected circumstances, such as traffic accidents and unemployment, may cost you unexpected expenses and affect the progress in achieving your financial goals.

Step 6: Follow through and regularly review your financial plan

Having a financial plan determined, follow through it. Review your existing balances every month and compare them to your financial plan, to ensure your budget is still valid. Make adjustments according to any changes in your resources, needs and circumstances.


Investment involves risks. This information is provided for general reference only.