You might be asking yourself, “What the heck is a wealth accumulation goal”? Let’s get that question clearly answered before we move on with the rest of the article. Having a wealth accumulation goal is basically a savings plan that has a very specific end goal in mind. It could be a short-term goal like in 5 years I want to buy a new boat for my family, or it could be a longer-term goal like in 20 years from now I want to purchase a vacation home. Either way, it’s all about assigning a specific dollar amount to a specific goal in a specific timeline.
Lets take a look at hypothetical scenario for our hypothetical family, The Steward’s. Mr. & Mrs. Steward would love to be able to buy a vacation home for their family. They want to save a total of $100k to use to buy the home. They create a goal of saving $1,000 a year for 20 years in a savings plan earning 7% interest. Will this plan allow them to achieve their goal? Lets take a look!