Step 1:
Define your goals
Every smart investment starts with a clear goal. Whether you’re growing wealth, generating income or protecting your savings, your purpose should shape your plan.
Step 1: Define your goals
Why are you investing?
Goal selection
For investors focused on building wealth over years or decades.
Examples
Saving for retirement
Building a nest egg for financial independence
Key attributes
Time horizon: 7+ years
Risk level: High (volatility is normal)
Best for: Investors who won’t need the money soon and can ride out market ups and downs.
Common investments
Shares: Funds or ETFs that only invest in the shares of individual companies (e.g. S&P 500 index funds).
Growth funds: Diversified funds with a large proportion of growth assets such as shares and property.
Alternative assets: Such as cryptocurrency or infrastructure assets.
Key investing principle: Invest now
The best time to start investing is right away. Compound returns pile up over time, so the sooner the better.
“Time in the market beats timing the market.” Compound interest works best over long periods, so start early.
For investors who want steady returns or are looking to fund an upcoming milestone.
Examples
Earning passive income
Saving to fund a child’s education
Key attributes
Time horizon: 3–7 years
Risk level: Low to moderate (some fluctuations, but less than shares)
Best for: Investors who need reliable returns but can’t afford high risk.
Common investments
Bonds: Funds that invest solely in government or corporate bonds, with lower risk and more stability than shares.
Dividend funds: Funds that invest in companies that pay regular dividends (e.g. utilities, blue chips).
Balanced funds: Diversified funds with a good mix of shares and bonds (e.g. 60/40 portfolios).
Key investing principle: Diversification is essential
Diversification smooths portfolio performance over time while helping protect investors against catastrophic losses.
“Diversify to reduce risk.” Split your money between income-generating assets and safer options.
For investors who want to preserve capital while earning some return.
Examples
Building a rainy day fund
Preserving funds needed for a house deposit
Key attributes
Time horizon: 0–3 years
Risk level: Very low (minimal fluctuations)
Best for: Investors who need quick access to cash or can’t afford losses.
Common investments
High-interest savings accounts: Liquid and low-risk.
Cash and money market funds: Short-term, stable returns.
Short-term term deposits: Lock in a rate for a few months to a year.
Key investing principle: Understand the risks
Learn before leaping. Understand the relationship between risk and return over time.
“Safety first!” Prioritising liquidity and capital preservation will likely mean minimal exposure to assets like shares and bonds that can fluctuate significantly in value.
Helpful tips for setting your investing goals
Your goals shape your strategy
A retirement portfolio looks very different from a house deposit fund. Always align your investments with your overarching financial goals.
Example: If you need the money in 2 years, shares are risky. If you’re investing for 20+ years, they’re much better suited.
Mix and match goals
Most people have multiple goals (e.g. retirement and an emergency fund). It’s common to have dedicated investment portfolios and strategies for each distinct goal, so split your money accordingly.
Example: Many investors already do this, with a KiwiSaver portfolio for retirement and a separate investment portfolio for liquidity and shorter-term goals.
Revisit your goals annually
Life changes, so should your investments. A new job, a baby or another change in your personal circumstances may mean adjusting your financial goals.
Example: It’s common to revisit your goals after buying a first home, as you no longer need to invest conservatively to preserve your deposit and can start investing more long-term.
Ready for the next step?
Now that you’ve set your goals, let’s talk about the other half of the equation: your investing constraints.
Join the InvestNow KiwiSaver Scheme today
Submit an application, manage your investments and view portfolio performance easily from your online account.