April 15, 2019
This post is sponsored by TD Direct Investing. All views and opinions expressed represent my own.
Want to cut straight to the good stuff and see how TD Direct Investing Goals (formerly called TD GoalAssist) works? Watch the video below for my full video tutorial!
If you want to learn about TD Direct Investing’s new app called TD GoalAssist™ which launched on Oct. 27, 2020, you can read my full post about that here.
Do you know what the most common questions I get when I do a workshop or webinar are?
“Should I invest in stocks?”
“What should I invest in to double my money?”
“What should I invest in…period?!”
“Do you recommend index funds, ETFs or mutual funds?”
They’re all great questions, but there’s another question that needs to be answered before we can talk about what you should invest in.
What’s your investment goal?
Investment Planning Starts with Goal Setting
There’s no point in talking about the “How?” if you haven’t figured out the “Why?”
The thing is, when people think of investing, they often assume there’s only ever one “Why?” You know what I’m talking about — retirement savings. For a long time, I even thought that the only reason you would invest is to retire one day.
Well, I was wrong.
There is a multitude of reasons why you might invest. In fact, you can categorize those reasons into 3 different types of investment goals:
- Short-term investing goals (1-2 years)
- Intermediate investing goals (2-5 years)
- Long-term investing goals (5+ years)
This is actually one of the lessons I share in my Investing Foundations for Canadians course.
For example, here are some investment goals you may have outside of retirement savings:
- Child’s future post-secondary education
- Home down-payment
- Big trip
- Wedding
Why You May Not Have Thought About Investment Goals Before Now
Up until now, you may not have thought much about goal setting and investing, and here’s why I think that is.
First, if you’ve traditionally worked with an advisor who manages your investment portfolio, you likely talked about your investment goals in your first few meetings with them, then they built you a portfolio to match those goals. However, if that was the last time you discussed your investment goals, it might be time to talk to your advisor again (because investing goals, like life, don’t stand still) or think about investing with someone else if your current advisor isn’t the best fit for you.
Second, if you’ve been investing through a robo-advisor, you would have chosen your investment goals in the initial investor questionnaire you filled out when opening your account. And then, just like the investment advisor scenario, a portfolio would have been selected for you based on those goals and you’d start investing. Some of the robo-advisors out there do a one-year anniversary goal check-in to see if anything’s changed, but you probably won’t ever get an email or call to see how you’re doing. It’s up to you to keep track of your progress.
Lastly, if you’re a DIY investor, you may have completely missed this step of figuring out your goals before you started investing. I see this a lot, actually. Lots of people get excited about building their own couch potato portfolio based on some models they found online, then they start investing through a discount brokerage, but they miss a very important step in investment planning: goal setting.
How to Keep on Track When DIY Investing
That’s why I’m excited to see a new development come out of TD Direct Investing called Goals.
First and foremost, if you’re new to the world of DIY investing, that’s okay! There are many great resources out there to help you (one of my personal favourites is John Robertson’s book The Value of Simple), but in general, it means you’re the one picking your investments and in control of your portfolio. It gives you much more flexibility and freedom with your investments, not to mention some significant savings in fees.
Traditionally, DIY investing was only a thing for the experienced investor. There’s a lot to know and a lot of responsibility involved in being your own investment manager, but TD Direct Investing is trying to make it simpler and more accessible. They want to educate and empower current and future DIY investors, something I was pleased to hear when I met with the Goals developers in-person last month.
Also, in case you’re wondering, Goalsis a new add-on feature to TD’s Direct Investing platform and it’s completely free. Basically, they just wanted to improve their platform and offer something no other discount brokerage was offering. They’ve made their platform even better with more reasons for DIY investors to switch over to them.
What Are TD Direct Investing Goals?
What exactly are Goals? Basically, it’s a free interactive financial planning tool within TD’s discount brokerage platform, WebBroker. It helps you set investment goals with specific timelines, test out different scenarios to see how they impact your ability to reach those goals and allows you to watch and monitor your real-time progress towards your goals.
It also allows you to set up a number of different goals with different time horizons and investor profiles, while still keeping everything organized in one place.
How Does TD Direct Investing Goals Work?
It may be hard to visualize how it works, so to help, I’ve plunked down some of my own personal money into it to show you how it all works.
Want to Learn More About Goals?
TD Direct Investing really wants to educate its customers, so on top of all the great resources they offer, they also run frequent free online Master Class workshops and webinars, including one on how to build your own investment plan using Goals.
To learn more and sign up for their next webinar, click here.
