Investing for Other Goals: Home, College, or Big Purchases?

Today we're diving into a super important topic: investing isn't just about saving for retirement, folks! We’ve got to chat about all those other life goals, like buying a house or sending the kids to college. Investing for Other Goals: Home, College, or Big Purchases? I mean, who wants to put all their eggs in one basket, right? We’ll break down how to balance those immediate needs with long-term goals and what kinds of investments make sense for each timeline. So, buckle up as we explore how to keep your financial life in alignment, just like that car you don’t want veering off course!

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We kicked off today’s chat with a listener question that really hit home. It’s all about the balance between saving for retirement and tackling those other big life goals, like buying your dream house or funding your kids’ college education. I mean, who doesn’t want to make those sweet purchases without breaking the bank? So, we dove into the idea that life isn’t just about that far-off retirement goal – there are tons of milestones we hit along the way, and each one needs its own game plan.

I shared a story about a couple who came to me wanting to invest for their child’s college. They were all hyped up about a hot stock tip from a coworker, thinking they could cash in overnight. But hold up! I had to remind them that we needed to look at their timeline first. Short-term goals need different strategies than long-term ones, and it’s crucial to match your investments to the right time horizon. Let’s be real, nobody wants to risk the money they need for something important just because they were trying to chase a quick win.

We talked about the three main time horizons for goals: short-term (1-3 years), medium-term (3-10 years), and long-term (10+ years). For short-term goals, think safety first – savings accounts and CDs, you know the drill. For medium-term goals, it’s about finding that sweet spot between safety and growth, maybe a mix of bonds and conservative stocks. And then, retirement is where you can really let your investments ride the wave. It’s all about finding that balance and keeping your goals aligned. So, as we wrapped up, I encouraged everyone to pick a non-retirement goal, jot it down, and figure out the timeline. It’s all about matching your money to your life goals, folks!

Takeaways:

• Retirement isn't the only goal we should be saving for; other milestones matter too.
• When investing, consider your timeline and choose safe options for short-term goals.
• Balancing saving for retirement with other priorities is key to financial health.
• Aligning your investments with your life goals reduces stress and helps avoid regret.
• Different time horizons require different investment strategies to meet your goals effectively.
• Prioritize short-term needs without sacrificing long-term retirement savings for a balanced approach.

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Episode Transcript

(00:00):
I got this listener questionthe other day and I said this is
a perfect question to talkabout on today's show. Ralph, I know
retirement is important, butwhat about other goals like saving
for a house, paying for mykids education or even a big purchase.
How do I invest for those? AndI thought this was an excellent question.
As we talk about investments,it's so easy to get stuck on just

(00:22):
that vision of retirement.Listen, life's not all about just
what happens in the end life.Not every goal is retirement. Life
has milestones. Buying a home,sending kids to college, even dream
purchases. Each one has adifferent timeline which means different
investing approaches. Let'stalk about that on today's show.
This is financially ConfidentChristian, your daily dose of gospel,

(00:45):
grounded insight and faithdriven tips to help you break the
cycle of financial shame withconfidence. Hey there, welcome back
to the show. My name is Ralphand I, I have a passion for the topic
we're talking about today. Forover three decades I've helped families
just like you, people justlike you balance saving for retirement
with other priorities. Andlisten, there's a lot of them out

(01:06):
there, buying a new home,educating our children. I've been
right where you are and I'vehad to make those tough choices myself,
deciding how to balance thoseimmediate needs with those long term
financial goals. And I use theword balancing because it's so important
we understand that it reallyis a balance. So I want to start

(01:27):
off with a couple that Iworked with a few years ago. They
came in and sat down with meand they wanted to invest for their
child's college. And I'llnever forget, husband and wife came
in and sat down. They had toldme about, hey, they talked to somebody
at work and they were temptedin this high return stock, somebody
at work could give them a tip.How many times I hear about these
tips, they were going to makea quick killing overnight. I remember

(01:48):
I said oh, let's take a stepback real quick. Let's take a pause
here for a second. And I tooka look at their timeline and I said
wait a second. Timeline wise,some safer investments might make
more sense because I wasworried about them getting into this
investment that didn't makewhat they thought it was going to
make in the short term. And asI was preparing for today, I found
this quote from Susie Orman. Ithought this was just brilliant for

(02:10):
the topic we're talking abouttoday. Investing isn't just about
retirement. It's aboutaligning your money with your life
goals. And see that's thetruth. Susie nails it here. That's
what I'll talk about ontoday's show. Because it's all about
finding that alignment. That'swhat it's all about, isn't it? Think

(02:30):
about a car you're drivingdown the road. As I was prepared
for today's show, I thoughtabout this. A car, got a car driving
down the road. All of a suddenyou start feeling it pulling the
one way or the other. I don'tknow much about cars. But then I
realized, wait a minute, thisthing's out of alignment. Well, if
I don't do something aboutthat, what happens? At some point
I'm going to be looking at itand the tires are going to get a
weird wear on. That's whathappens if your car is not in alignment.

(02:51):
Well, if you don't have yourfinancial horizons in alignment,
guess what? You're going tofind yourself in a very similar situation.
So that's what I want to talktoday about, those time horizons.
It's really important that wenarrow this down because there are
so many things to save morebesides retirement. Listen, I'm not
saying retirement is notimportant. I've done many shows the
last couple days about thisactually. Actually many shows over
my 30 years of working in thisindustry. That's important. But there

(03:16):
are other goals. So let'sstart off with understanding. Really
what I see are the three maintime horizons. There's the short
term goals, that's those oneto three year goals. There's the
medium term goals, that's thethree to ten. And then there's the
long term goals, ten plusyears. But each of these have different
things that we need tounderstand. Let's talk about those
short term goals first. Like Isaid, these are your one to three

(03:38):
year goals for investing inthese things. You want to use things
that are relatively safe.These are the times to use savings
accounts, certificates ofdeposits, maybe money market accounts.
Because you can't afford torisk money that you need soon. Go
back to that example I talkedabout. These folks are going to be
putting their children intoschool in just a couple years. They

(03:59):
didn't have time for a quickwin. Yeah, great if it does win overnight,
but what if it loses? Theydon't have time to recover from that.
So think about those shortterm goals. If you've got a short
term goal, you've got to useshort term investments. Things that
are safe, things that don'tcarry that risk. These are the things
that the money you're going toneed soon, second tier, mid range

(04:21):
or midterm goals. Those areyour three to 10 year goals. Now
here's where you actually canthink about considering a mix of
bonds and maybe someconservative stock funds. Again,
like I said the other day,even funds have risk. But here what
you're doing is you'rebalancing that safety with some growth.
You're saying, okay, Ralph,it's cool, like I'm going to take
a little bit of risk, I'mgoing to put myself out there a little

(04:42):
bit because I got a little bitof a time horizon. But you're balancing
that with that safety because,yeah, I'm going to need this money
in three to ten years. I knowit's a big swath of time, maybe I
have to get a little moregranular than that. But you got to
think about what is my timehorizon, when do I need this money?
So what does my investment mixneed to look like? And then finally
we look at our long termgoals, which most people, that's

(05:04):
retirement. For most people,retirement is a long term goal. I'm
gonna tell you right now, Ijust turned 53 a couple weeks ago.
That retirement goal isgetting a little closer for me. So
even in my own life, I gottastart thinking about even in my retirement
portfolio, what are thestocks, what are the investments
that I have and how much timedo I have to really make a change
if the market changes? Becauseit's all about prioritization. Always

(05:29):
keep retirement on your trackfirst. That's very important. A lot
of people miss that. I did ashow about that just the other day.
So many people are not puttinga month away for retirement. But
you can't sacrifice everythingfor retirement. There are other goals.
Maybe you're listening rightnow. You're watching right now. You're
like, Ralph, we really wouldlike to get a house. We're tired
of renting, or we've gotchildren that are gonna be going

(05:50):
to college or secondaryeducation. Or maybe like most people,
you want to go take thatvacation, but you don't want to run
up credit card debt to do it.So you've got that saving goal. Prioritize
those things. Because when youcan find this match, when you can
bring, like Susie Orman said,when you can bring these things into
alignment, that's when you canhave peace of mind. It's going to

(06:10):
reduce your stress and it'sgoing to reduce your regret. Because
here's the truth. I have seenthis in my own practice and even
in my own life to some extent.Timeline issues cause so much stress,
they cause so much anxiety andHonestly, they cause so much regret.
And these are the kind ofthings you gotta adjust over time.
Well, let's get right into theword of God, because I always want
to give you scripture to backup what I'm saying. And today we're

(06:32):
going to Proverbs chapter 24,verse 27. Put your outdoor work in
order and then get your fieldsready. After that, build your house.
And see, this is the maingoal, isn't it? Plan, prioritize.
Before you spend, think aboutthose short term goals. What are
those mid range goals, whatare those long term goals? Because

(06:53):
until you understand atimeline, you don't know where to
invest. Like I said, this 30day series is all about a 30,000
foot view. But as we get alittle deeper into this, we need
to understand it's not justabout, well, there's these type of
investments now we've got tomatch up, okay, this type of investment
for this horizon, this type ofinvestment for this horizon. And
that's really the key totoday. It's all about building that

(07:15):
alignment, building those timehorizons and really understanding
what our goals are and findingthe right investments for those.
Well, how about we praytogether right now, Lord? We just
thank you for the wisdom thatyou give us, Lord, and the ability
to prioritize goals wise. Andwe ask that you would just help us
to do that better these days.Help us to have patience to save

(07:35):
and patience to invest at theright pace and avoid those temptations
that are so easy easily comingto us. When people tell us about
these short term things andit's a sure thing. Help us to understand
the horizons that we have andhelp us to understand the different
things that we need to do tobe in gratitude for the things that

(07:56):
you give us, the resourcesyou've already provided to us. And
as we go through thosemilestones of life, Lord, help us
to be mindful of those things.Help us to develop a plan that meets
those things, Lord. And wejust ask this with complete confidence,
you, in the name of Jesus,Amen. I always want to give you an
action item. So today's actionitem is I want you to pick one non

(08:16):
retirement goal. Doesn't needto be anything elaborate. Maybe it's
building your emergency fund,maybe it's saving for a vacation.
Maybe you want to go and buythat house finally, maybe that's
your goal. Write it down andthen write down right next to it,
what is the timeline for that?Is it one year, is it five years,
is it 15 years? And then askyourself this question because maybe

(08:36):
you've already startedinvesting. Ask yourself, is the money
in the right place for thattimeline? See, that's a great question
to ask yourself. Always asyou're going through these investment
decisions, ask yourself thosequestions. Is my money in the right
place for that timeline?Because, listen, times change. When
I meet with people who aregetting closer to retirement, we're
changing our portfoliosaround. One of the things I would

(08:58):
really appreciate you would dois if you're getting value from the
show, when one of the bestways you can express that is share
the show with somebody else.Everybody needs to understand the
things we're talking about.And if you share the show with them,
you can help them become amore financially confident Christian.
Because in the end, not everygoal is retirement. I hope I made
that crystal clear today.Timelines matter. That's the key

(09:20):
to this whole thing. Thinkshort term for safety, medium term
for balance, and long term forgrowth. And again, in the end, don't
let your other goals rob yourretirement. That's a warning, kind
of leaving it here at the end.But it's important that you understand
that. But with planning andprayer, and I truly believe this
with every ounce of my being,with planning and prayer, you can

(09:40):
prepare for life's milestoneswhile still building for that future.
So I just want to encourageyou today, go out there today and
be that financially confidentChristian you can be. Now, tomorrow
we're going to talk about hownot to keep all your eggs in the
same basket. Grandfatheralways told me that. He said, son,
don't keep all your eggs inone basket. So that's exactly what
we're going to talk about onthe show tomorrow. So I encourage

(10:01):
you to join me tomorrow. Andtoday, I just want to encourage you
again. Go live out thatfinancially confidence that you have.
I believe in you, believe inyourself. And more importantly than
any of those things, Godbelieves in you. God bless you. And
you have a great day today, Ra.