Your Five Financial Stages and Investment Goals

Updated: February 24, 2023

At what age should you start investing? The answer is as early as possible.

Doing so not only maximizes your investment earnings but more importantly, brings you closer to the end of the finish line, which is achieving financial freedom.

Furthermore, it’s essential to realize that investing is a skill. Thus, it would be best if you honed it so that you can get better at it over time.

To guide you with your investing journey, here are the five financial life stages and the corresponding investment goals you should have for each stage.

I learned these from a BPI Investment Fund manager who taught me about life cycle investing. So, I hope you’ll find this information as helpful as I did.

Stage 1: Orientation – Eager Beginner

Ideally, they are young urban professionals in their 20’s. The stage when your financial goals should be:

  • To save money and to make it a habit
  • To invest in knowledge and learn about investing to increase financial literacy

Stage 2: Exploration – Investment Apprentice

People in their late 20’s to mid-’30s. If you’re in this stage of your life, then your goals should be:

  • To gain real experience in various investment instruments – from low, medium to high-risk investments
  • To develop the skill to choose the right type of investment that will best serve one’s financial goals

Stage 3: Accumulation – Wealth Builder

Mid to senior management employees in their late 30’s and 40’s. Investment goals should be:

  • To optimize and maximize returns from savings and investments
  • To prioritize wealth accumulation and focus investments for one’s retirement goals

Stage 4: Preservation – Asset Protector

Senior executives and successful entrepreneurs in their 50’s. Your investing strategies should be:

  • To protect one’s accumulated wealth by investing in less risky instruments
  • To achieve enough passive income to be able to fully retire and be financially free

Stage 5: Disposition – Legacy Bestower

Retired and self-sufficient individuals who have been champions of investing and asset building. Your goals in life now are:

  • To ensure that your wealth and legacy are properly bestowed to the next generation
  • To serve as an inspiration for others so that they can also achieve the financial freedom that you currently enjoy

Think about your status and investment portfolio and see where you are right now in these five financial life stages. Are you “on schedule”? Or late? Or perhaps ahead of your time?

However, remember that where you are right now isn’t as important as moving toward advancing to the next stage. Keep the momentum, go forward, and see you at the finish line.

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  1. Very accurate for most people on their investing journey. I believe that some ambitious folks may bypass a step or two when they invest in themselves and a great business idea. When/if cash is rolling in, you then have the option to accelerate the learning about other investments either with a mentor, lots of time to read great books or other means to get you off to a rapid start.

  2. Adding a PS to my comment above from one year ago. We fully agree that investing should start as young as possible. One thing I personally did for our young troops was make an investments on their behalf in our family business. It was a hard lesson for them because our business was shuttered for months due to the COVID-lockdowns. They had only collected two monthly payments and then NOTHING for a long period.

    With business open and the income flowing, we sit our guys & one gal down at the end of each month to make the entries on their personal spreadsheets. Each of them has a three ring binder that includes spreadsheets they fill in to track their personal investment in the family business. They also keep all other financial things in the binder like passbooks and important contacts such as our business lawyer and accountant in case parents become incapacitated. These days we get nothing but smiles as they watch in real time the effect of compounding! I can honestly say the investment in our family business will become ” legacy size” money in just a few more years.

    We have still not made time to go into the city to complete the requirements for our troops to have stock trading accounts of their own. My wife does not want the risk with Covid still lurking out there and I can not fault her for that. I think it ridiculous that we can not complete the opening of the children’s stock accounts with the ITF (In Trust For) agreement at a local bank branch but heck, it is the rules in the Philippines. In the meantime, the troops still open their own trades in my US based accounts from time to time and they are learning ” on the fly” what I do and how I do it.

    I believe I am correct in saying that we (Beautiful Bride & I) are at the ” life is good stage” in our lives.

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