Wealth With Purpose

The process for achieving long-term goals

One of the foundational elements of good money management is the need to have clear long-term objectives. If you speak to a financial planner they will usually make statements like “think long-term”. Generally speaking this is good advice, although I prefer to say “think eternal’, that is consider the impact of your objectives and finances and how they advance God’s kingdom.


When it comes to making long-term plans it is important to think about the big picture. Let me give you two bible verses that I think will encourage you:

“Where there is no vision, the people perish: but he that keepeth the law, happy is he.”
Proverbs 29:18

We should build a vision for our finances that is tied to our purpose, to the reason that God has put us here on earth. A vision will inspire you on your life journey to live for eternity rather than get caught up in the day-to-day distractions. Secondly, when it comes to long-term planning, get advice:

“without consultation, plans are frustrated, but with many counsellors they succeed” Proverbs 15:22

Getting professional advice is likely to increase your chances of achieving your goals.


Start Now – To increase the likelihood of achieving long-term goals such as financial independence, it is critical to start saving and investing at the earliest possible age.

Sound money management usually involves a clearly defined process. Below is a simple process for achieving your long-term goals:


Set Realistic & Biblical Goals – It is important to have clearly defined S.M.A.R.T.

Time bound

Sample Long-Term Goals

• Giving Goals – e.g. increase my giving by 1% p.a. each year
• Saving to start a Business – e.g. Save $50,000 to invest in a new business within 2 years
• Saving for a Deposit for a home – e.g. save $50,000 as a deposit for my first home in four years.
• Funding Retirement – save $1.2Million to provide a retirement income of $50,000 per annum from age 65
• Kid’s Education – save $150,000 towards my children’s education that is needed in 10 years time.
• Start a Charity – I need $20,000 as seed capital for my charity in 3 years time.

In order to achieve your long-term goals you need to:

• Know what you need
• Know how to get there


Depending on your long-term goal, not all of these three steps will be required. These three steps will apply to someone contemplating the need to create a retirement income stream. For the majority of goals you will only need to know the capital required.

Step 1: Income Required

The general rule of thumb is that you need an income of approximately 75% of your final salary in order to maintain your living standards. The best method is to do a budget and determine what you really need.

Step 2: For how long?

Nobody knows how long he or she will live. A good rule of thumb is to assume that you will live at least 5 years beyond the average life expectancy for your gender.

Step 3: Capital Required

Once you have determined how much income you require and for how long, you can then determine the capital you require to achieve this result.

You need to make some assumptions:

• Rate of inflation (about 3% – depends on your nation)
• Investment returns (5%)
• Rate of taxation


Step 1: What do you have now?

Your current level of capital will impact how much you need to save in order to achieve your target capital. You need to focus on investable assets. Generally this will mean:

⊗ Excluding your family home (unless you plan to downsize)
• Include existing investments
• Include Retirement Funds – only if you are focusing on a retirement goal

Step 2: What do I need to save?

How much you need to save will depend on your answers to the following questions:

Q. How long (years) to reach goal? How old are you now?
Q. What return will you get between now and then? (suggest no more than 5%)
Q. What can you afford to save each month?

Therefore: How much do you NEED to save?

Step 3: Adjust budget or expectations

If your required level of monthly saving is impossible to achieve, that is to say you don’t earn enough, then you will need to either make cuts to your budget so that you can save more, or adjust your expectations of capital required downwards.

Step 4: Determine best tax structure

Consider what tax structure you will use to minimise your taxation liability. Generally speaking retirement funds have lower taxation rates. This will vary from country to country.

Step 5: Determine appropriate investments

Select investments that are likely to create a ‘growing income stream’. That is investments where the income stream (i.e. rent or dividends) grows each year at a rate equal or greater than inflation.

Step 6: Track & Review

Regularly check to see you on track to reaching your goals! Make sure you get the right professional advice as well as other kingdom minded people to continue on your way to success.

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