One of the first things we do with clients is get a picture of where they are. There are 10 key areas we believe are critical to achieving financial independence. In this article I will go through the first five.

Have clear goals

Regardless of whether you have a plan to achieve or fund your goals, you need to know what they are. When thinking about your goals, go beyond the superficial goals that we often hear of “put more into super” or “have another investment property”.

Goals should be meaningful, realistic, and measurable, and should include both intrinsic and extrinsic goals.

Intrinsic goals include ones like having enough money to be comfortable and safe, having a healthy work-life balance, spending more quality time with your kids, becoming an expert in your field, having a great circle of friends, or learning a new language.

Extrinsic goals are really wants rather than needs. They include ones like owning the latest car, travelling to every country in Europe, or living in a new house.

Do you have clear goals?

Create your future


Ensuring you have a roof over your head, food in your belly, and are safe is the first step. If you are struggling to do this, ask yourself if you are living within your means.

There is no point borrowing to buy a new car if you are struggling to keep your home and put food on the table.

Are you living within your means?

Are you spending money on the things that are important to you?

Are you able to save?

Funding your goals

Once you are covering your basic needs, the next area to look at is how you fund your goals.

The first step is to determine if your goals can be funded from your regular cashflow or if they require a discrete savings and investment bucket.

The government’s moneysmart website has a savings goal calculator that makes it relatively easy –

Do you have a plan to fund your goals?

Understand risk

Before we move to investing, it is important you understand risk.

The mistake I often see is people taking excessive risks for short-term goals or not taking risks with long-term goals.

If there is an expectation of higher returns, it is because there are more potential risks with it. If there weren’t any risks and the higher returns were pretty much guaranteed, everyone else would be investing in it – and the returns would then be reduced.

Do you understand all the risks associated with different investments?


Investing is nothing more than buying assets that will provide you a mix of income and growth to help you fund your goals. The types of assets you invest in will depend on whether your goals are short or long-term goals.

If you have a short-term goal (say buying a house in the next 2 years), when we look at the risk (and benefit) the most appropriate investment may be a high interest savings account. Boring, not very exciting, but wise.

If you have a longer-term goal (say retiring well in 20 years), it may be appropriate for you to borrow to invest in a high growth asset like shares or property. I say may, because you may not need to do it, or you may not be cut out to withstand the rollercoaster of investing with borrowed money.

Do you have an investment plan?

Can you sleep at night with your investments?

In the next article I will go through the other 5 parts of your financial life that are important to helping you achieve financial independence.

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About the Author
Phil Harvey is an independent financial adviser. In 2017 Phil set up his company Construct Wealth to help clients best manage their finances so they focus on what is important to them. He is a founding member of the Profession of Independent Financial Advisers.

General Advice Warning
This advice contains general information. It may not be suitable to you because it does not consider your personal circumstances. Phil Harvey and Construct Wealth are authorised representatives of Independent Financial Advisers Australia (AFSL 464629)

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