If you’re saving for retirement, which is decades away, you have a long investment horizon. This allows you to consider riskier investments like stocks because you have plenty of time to recover from market downturns. Over the long term, stocks historically tend to offer higher returns.
So, your investment horizon guides your choices. Short horizons favor safer, more stable investments, while longer horizons can allow for more risk because you have time on your side. It’s all about finding the right balance between risk and potential reward based on when you’ll need your money.
Business Expansion or Sale
Judy can now set a long-term goal of either expanding her business into new markets or preparing it for sale within 10 years. The proceeds from a successful sale can be a significant source of generational wealth.
Estate Planning
Judy can also consider long-term estate planning to ensure a smooth transition of her business and assets to the next generation.
The Next Generation
Judy consults with an attorney and creates a will and succession plan to pass on her business and wealth to her children or chosen beneficiaries.
By setting clear, actionable goals for both the short-term and long-term, Judy took deliberate steps toward building generational wealth that aligns with her unique financial situation and aspirations at every stage.