6 Tips to Achieve Your Long-Term Financial Goals

First Republic Bank
July 9, 2020

One of the most exciting parts of looking toward the future is planning for the dreams you have — things like travel, hobbies, personal ambitions and fun projects. Some of these desires may have been incubating for years, or others may be newfound pursuits you can't wait to dig deeper into.

No matter how your dreams manifest, you'll likely need capital to fund them. That means prudently planning in the short-term to be able to live your dreams in the long-term.

We'll cover tips and strategies to achieve your financial goals, and best position yourself to achieve your dreams and enjoy your life to the fullest.

1. List your need-to-haves, nice-to-haves and love-to-haves

The first step in setting financial goals is figuring out what, exactly, you'd like to finance with your wealth — and how much money you need to finance them. Here, budgeting is key.

A smart and organized way to approach this process is to classify your spending categories into three areas: what you need to achieve, what you'd like to achieve and big, exciting goals that you'd love to achieve. Of course, although you'd like to put everything on the "must-have" list, you may be best-served planning for the more conservative side of your wealth growth — naturally, if you exceed your financial goals, you can pursue even more of your plans.

Then, consider creating three different budgets: one for the “need-to-have” category, one for “nice-to-have” and one for “love-to-have.” This way, you'll be able to set financial goals based on the amount of money you need to finance everything in that first "need-to-have" tier. Next, as you accrue wealth, you can see if you have the means to enter into the "nice-to-have" tier and then the "love-to-have" tier.

2. Know your costs

A huge step in setting financial goals and positioning yourself to best reach them is to intimately understand the costs of what you'd like to achieve. Even if what you're striving toward is far down the line, it's helpful to seek information on what you expect them to cost — whether that's financing a family trip around the world, upgrading a car to celebrate a promotion or retiring early and pursuing a hobby you’ve always wanted to try. You can always adjust the estimated costs down the line (this may, of course, mean augmenting your financial target).

An important thing to consider is whether these dreams have fixed costs or variable costs, and if you expect the costs to change with the passage of time. As you're goal-setting, it may be helpful to build in a buffer to cover any unexpected costs.

3. Make sure your portfolio matches your goals

A diversified portfolio is important for making sure your assets are safe, and that you're creating different sources of income in addition to your “day job.” On the less volatile end, this could include fixed-income financial instruments, such as corporate or government bonds, which promise fixed amounts of cash flows at fixed dates. With fixed-income investments, you as an investor are essentially loaning money to a corporation or government, with the expectation that they will pay you back, with interest, at a set time.

On the other end of the risk spectrum are equity investments, which allow you to hold partial ownership of issuing companies. Equity investments, such as stocks or stock funds, generally expose you to more risk but could offer more return; when you purchase a stock, you’re investing in the success of a given company, and the value of your stock will fluctuate with the fortunes of that specific company, as well as other market factors.  

Aside from fixed-income and equity investments, there are also more unconventional income streams, such as purchasing an investment property to rent out.

Ultimately, all investments entail some element of risk, so it’s important to choose the optimal mix of asset classes to align your portfolio with your risk tolerance and your goals. Broadly speaking, the aggressiveness of your portfolio allocations should reflect how far away you are from the time at which you'd like to start using your money. A financial professional can help balance your portfolio and allocate your investments based on your needs and when you'd like access to your money.

4. Evaluate your options for accessing capital

Sometimes to reach financial goals in the long term, you need to take action on opportunities in the short term. However, it doesn't always make sense to liquidate your investment accounts or tap into your savings to access the capital you need. Though many like to stay debt-free, there are instances in which it may make sense to consider a financing instrument such as a personal line of credit.

A personal line of credit is a set amount of money from which you can borrow (up to the limit) for a given period of time, referred to as your draw period. Similar to a credit card, you take from the available balance only the amount you need, and you pay interest on that amount.

This type of funding enables you to access short-term capital for immediate, planned expenses. For example, say you get a promotion at your dream job and move your family to a new city; as part of your move, you might consider buying a new car or furnishing your new home, but you may be reluctant to liquidate your investment accounts to cover these costs.

A personal line of credit can be an ideal solution for household planning needs because how much you ultimately borrow is up to you. Unlike other types of debt financing, you only pay interest on the money you actually do borrow. Learn how a personal line of credit compares to other types of personal loans here.

Even the most avid savers and planners may benefit from convenient access to funds for large purchases. Consult this personal line of credit calculator to explore whether this option may make sense for you.

5. Keep tabs on your progress

Costs and market conditions may change and evolve, which can affect both the price of what you'd like to ultimately finance as well as the amount of money you have to reach that goal. Stay in tune with the market and regularly check in with your financial advisor. Your advisor will have the most updated information and be able to precisely tell you what developments directly affect your investments and your trajectory to reach your financial goals.

But, remember, don't get too consumed by every small move. This may mean stepping back from the everyday headlines, and not being tempted to make rash moves. It's possible that you'll be on track to reach your financial goals in the long term, even if some sectors of the economy are volatile in the immediate term.

6. Don't be afraid to think creatively

There's more than one way to grow the capital you need to reach your financial goals. Investment and wealth-growth strategies are different for each person, and should be tailored to the end result you'd like to have. Check in with your financial planning professional, who may be able to help you see different, creative avenues to reach your financial goals, whether that's monetizing your skills — even at a later age! — or seeking out alternative investments to grow your wealth.

Everyone has dreams, and most of the time, dreams cost money. Stay on track for your financial goals through a mix of planning, budgeting and carefully weighing your options for accessing capital as you advance in your career. These tips will help you find the sweet spot with your finances and your ambitions to get yourself where you'd like to be.


This information is governed by our Terms and Conditions of Use.

Personal Line of Credit consists of a two-year, interest-only, revolving draw period followed by a fully amortizing repayment period of the remainder of the term. Draws are not permitted during the repayment period. Full terms of 7, 10 and 15 years available.

This product can only be used for personal, family or household purposes. It cannot be used for the following (among other prohibitions): to refinance or pay any First Republic loans or lines of credit, to purchase securities or investment products (including margin stock), for speculative purposes, for business or commercial uses, or for the direct payment of post-secondary educational expenses.

The terms of this product may differ from terms of your current loan(s) that are being paid off, including but not limited to student loans. By repaying such loans, you may permanently be giving up tax and repayment benefits, including forbearance, deferment and forgiveness, and you may not be able to reobtain such benefits if this loan is refinanced with another lender in the future.

Borrower must open a First Republic ATM Rebate Checking account (“Account”). Terms and conditions apply to the Account. 

Contact your legal, tax and financial advisors for advice on deciding whether this is the right product for you. Terms and conditions apply.

Product is not available in all markets. For a complete list of locations, visit Applicants must meet a First Republic banker to open account. This is not a commitment to lend; all lending is subject to First Republic’s underwriting standards. Applicants should discuss line of credit terms, conditions and account details with their banker.