The trouble with the way people invest for short, mid and long term goals is that they often approach them with the same mindset. For example, you might have a long-term goal but only begin investing for it a year before you expect it to mature, like saving for a house a few months before you intend to buy it. Or conversely, you might invest in high-risk assets using cash you require in the short-term. To help you avoid these pitfalls and make the most of your money, here are 10 tips on how to save and invest for short, mid, and long-term goals. 

1. Define Your Time Horizons 

• Short-term Goals: 0-3 years 
• Mid-term Goals: 3-10 years 
• Long-term Goals: 10+ years 

Understanding your time horizon is crucial for choosing the right saving and investment strategy and giving you the realistic sense of momentum you need to keep up to achieve your goals. 

For more tips on defining your goals read this article: https://support.myxeno.com/hc/en-us/articles/16032616374045-Lesson-1-Defining-Short-term-and-Long-term-Goals

2. Match Your Risk to Your Time Horizon 

• Short-term goals: Low-risk investments (e.g., high-yield savings accounts, Money Market Funds) 
• Mid-term goals: Balanced mix of stocks and bonds 
• Long-term goals: Higher allocation to stocks for growth potential 

Clearly defining your time horizon during the planning process of your XENO Goal Portfolio allows the strategy to allocate your investments appropriately. Try out the XENO Investment Planner to see how this works: https://support.myxeno.com/hc/en-us/articles/16196842290333-Investment-Planner  

3. Start Early for Long-Term Goals 

We can’t stress this enough; your long-term goals succeed based on how early you start investing in them. The power of compounding interest is your friend for long-term goals. Start investing as early as possible, even if it's just a small amount. 

Learn more about compound interest: https://learn.myxeno.com/articles/the-power-of-compound-interest-and-how-it-can-supe  

4. Keep Short-Term Savings Liquid 

For short-term goals, prioritize accessibility over high returns. This is because investing in assets that aren’t easily liquidated can cost you more in the long run. For example, say you invest money you need in one year into a real estate project. Selling real estate within a 12-month period of buying it will not only fail at maximizing returns on the investment, but you also stand potentially to lose the value of the asset and incur the heavy costs of buying and selling.  

Instead, opt for a savings account, money market funds, or short-term bond funds to keep your savings liquid while earning you a considerable percentage of returns. Fortunately, XENO diversifies your investments in its Money Market and Bond funds that enable liquidity and stability for your short-term goals.  

5. Diversify Across Asset Classes 

Don't put all your eggs in one basket, especially for mid and long-term goals. The last thing you want is, to lose all your savings for retirement under one asset class. Diversifying across stocks, bonds, real estate, and other asset classes helps to manage risk.  

6. Adjust Your Strategy as Goals Approach 

As you get closer to your goal, gradually shift to more conservative investments to protect your gains. 

7. Separate Accounts for Different Goals 

Keep your short, mid, and long-term investments as separate goals. This makes it easier to track progress and maintain the appropriate strategy for each goal. Check out this article on the extraordinary benefits of goal-based investing: https://learn.myxeno.com/articles/what-is-goal-based-investing  

8. Invest fixed amounts regularly for Mid and Long-Term Goals 

Invest a fixed amount regularly, whether weekly or monthly, regardless of market conditions. This strategy, known as cost averaging or systematic investing, can help you acquire assets over time while reducing the risk of buying only when markets are at their peak or most volatile.  

9. Automate Your Savings 

Because we are human and are always dealing with much more than to remember whether we have put away our savings, automating the habit allows us to stay consistent no matter what. Automating regular fixed deposits also takes advantage of cost averaging for longer-term goals.  

Learn how you can easily set up an AutoSave to your investment goals using XENO AutoSave: https://support.myxeno.com/hc/en-us/articles/16181198168989-Set-Up-AutoSave-to-Your-XENO-Investment-Account   

10. Regularly Review and Rebalance 

Finally, review your investment strategy annually or when significant life events occur. You might have experienced an emergency that required you to drawdown from one of your investments, that’s fine. Rebalance your portfolio to maintain your target asset allocation. 

Those are our top tips! We’re certain by following them you'll be better equipped to make informed decisions about saving and investing, whether you're planning for next year's vacation or your retirement decades from now.