* What you have: The first step to getting to where you
want to go is to know where you are now. No plan can be implemented without a starting
point. You must take the time to calculate your net worth. (You figure net worth by taking
your total assets and subtracting your total liabilities. The remaining amount is net
worth.)
* What resources you need for living: You may not have
a budget, but you need to find out how much money you need to maintain your lifestyle
before you invest. Otherwise, you may not have cash available when the mortgage is due.
* What you want in the future: Decide what you want
your financial future to look like. Do you want to retire early? Buy a second home? Send
your children to college?
* How you're going to reach your goals: You must
determine what amount of money you're going to invest, how long you plan to invest, and
what sort of return you require. Much of what you decide is based on your risk-tolerance
level. Can you sleep at night knowing that you may lose your entire investment? If the
answer is "No", find a security that has less risk. It may provide less of a
return, but at least you can get some rest.