30-Day Investing Challenge, Day 5: Set a Medium Term Goal
Yesterday we dove into why goals are important and starting our journey with some short term goals. A lot of times financial gurus split things into short term and long term goals and leave it at that, but I think there’s more nuance to it than that, so I like to include medium term goals in my planning.
For instance, say you want to buy a house, but you’re dead set on saving up a 20% down payment rather than just 3%. Given the average home value in America right now is $395,000 that means a $79,000 down payment. For most people it’s going to take them longer than 1-2 years (the designated timeframe for a short term goal) but less than 10 years (the designated timeframe for a long term goal) to achieve this amount. But if you simply put it in a High Yield Savings account you’re probably losing out on extra earnings that could help build the amount faster.
We’ll get to what accounts and investments you should choose for each goal on other challenge days. For now, you can focus on what your medium term goals might be. These are usually accomplished in a 3-10 year timeframe and include things like a wedding, down payment, or wanting to buy your next car in cash.
Action Step: Set 2-5 Medium Term Goals
Think of 2-5 things you’d like to achieve in the next 3-10 years and write them down using this template:
Goal name
Goal description and why you want to achieve it
When you want to achieve it (either a specific date, month and year, or just year is fine)
Feel free to set more than 5 if you wish!
Tune in tomorrow for our next challenge: Setting a long term goal.
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