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Do you have what it takes to be a successful investor? Heather Pelant shares her rule of thumb for setting — and achieving — her financial goals.

One of my favorite mantras that I’ve carried over from my days as a financial advisor is that it’s not always what you own, but why you own it, that counts.

We live in a world where there are countless options when it comes to investing, from individual stocks and bonds to exchange traded funds (ETFs) and more. We all appreciate having a wide variety of choices, but sensory overload sets in fast if you don’t have a goal in mind. A random collection of investments does not an investing plan make.

This is where investing with a purpose comes in handy. For example, I am admittedly somewhat delinquent when it comes to figuring out how I want to allocate my daughters’ 529 plans. I think it stems from the fact that they’re growing up much too fast. However, the thing that motivates me to put a plan in place is knowing that I’m investing for their future, laying the groundwork for their education. This makes the investment selection process much easier — I just have to keep focusing on the end goal.

Steps to Stay Focused: SMART

I modified a well-known management acronym, SMART, to fit my investing goal setting guidelines. Here’s the breakdown:


Write down your goals. Have you ever noticed that anticipating the packing process for a business trip can be somewhat stressful, but the minute you write down a list of what you need to bring, it seems a bit less daunting? It works the same way for your investments. Jotting down “Retirement at Age 70” or “Help Ava Pay for College” gives you a tangible objective.


You need to have a way to quantify your progress. Similar to those fundraising thermometers that you see at PTA meetings, it’s figuring out how much further you have to go to reach your goal is easier when you have a visual. Calculating that you’ll need to set aside X for the next Y years — then setting up automatic transactions so you don’t even notice — makes this a manageable process.


When in doubt, find someone who can help you. No one expects you to be an expert investor overnight, and resources abound. Whether it’s your money-savvy cousin who has already put two kids through college and knows 529 plans like the back of her hand, or a trusted financial advisor, it never hurts to get an objective opinion from someone with experience.


While you can automate payroll deductions to pad your 401(k), it’s not a good idea to set and forget your investments. The market will move up and down, and from time to time you’ll have to regroup. This doesn’t mean having a knee-jerk reaction every time the market fluctuates, but planning for taxes and rebalancing at the end of each year.


I told my clients time and again that the worst thing you can do is be close-lipped about your plans among others, especially family. If you’re planning for retirement, be open and honest about your situation with your loved ones. Make sure they know what your plans are in the event something happens to you.

A good way to get started on your path as a smart investor is to take advantage of social calendar reminders, like checking your 401(k) when you change your clock for daylight savings. Here are some helpful hints.


Heather Pelant is Head of BlackRock Personal Investing for BlackRock. She is a regular contributor to The Blog.