To continue enjoying all the features of Navy Federal Online, please use a compatible browser. You can confirm your browser capability here.

Bottom Line Up Front

  • Saving and investing go hand in hand to helping you build a solid financial future.
  • Using goal-based investing, you work toward accomplishing specific goals.
  • Time horizons organize your goals based on short- and long-term priorities.

Time to Read

3 minutes

June 28, 2022

Saving is an essential part of a good long-term strategy for financial security. But what about investing?

The truth is that saving and investing aren’t mutually exclusive—they go hand in hand! Together, they can help you build a solid financial future. The key is to have a long-term financial plan and a balanced mix of both.

Saving helps you put aside money for the future with guaranteed dividends and easy access to your funds. It’s a great way to prepare for unexpected expenses or for savings you plan to spend (down payment, vacation).

Investing generally gives you greater potential for growth over time, but it comes with some risk. You can earn money by buying part of a company, bond or fund. It’s great for longer-term goals (tuition, retirement, building wealth).

Before you start your investing journey, consider these questions:

  • What are my goals?
  • Can I leave the money to grow over time, or will I need to spend it on a specific short-term goal?
  • Do I want guaranteed returns, or am I willing to take some risk? If so, how much?

With that in mind, explore the ideas of goal-based investing and time horizons to see how they could apply to your situation.

Goal-Based Investing and Time Horizons

We all know you can reach some financial goals faster than others. It all depends on what you want to achieve and how long you have to achieve them.

With goal-based investing, you work toward accomplishing specific goals. You measure success by how well you’ve met your goals (instead of how your portfolio performed generally).

Choose Investment Types Based on Time Horizons

Some examples of short- to long-term goals many people work toward are:

  • vacations
  • down payments
  • tuition
  • retirement
  • building overall wealth

Knowing your time horizon—or how long you plan to hold your investments—can help you refine your plan.

Short-Term Time Horizons (less than 5 years). For goals that you can achieve in a relatively short time (vacations, down payments), you’ll want an account that isn’t likely to be affected by stock market downturns and potential losses.

Dividend-earning accounts that allow you easy access to your funds and/or that you can open for a limited amount of time are great for this type of goal. Although you may earn less than you might with stock market investments, these types of accounts offer guaranteed returns:

  • Basic savings accounts
  • Money market savings accounts
  • Certificates

Medium- and Long-Term Time Horizons (5-10 years or more). If you expect to take several years to achieve some goals (expenses related to starting a family, child’s education, retirement), market-driven investments like stocks, bonds and exchange-traded funds (ETFs) might work best for you. These types of investments offer the greatest potential for growth and, in spite of periodic downturns in the market, tend to yield higher returns over time.

Next Steps Next Steps

  1. Once you’ve outlined your short- and long-term goals, determine what kind of account makes the most sense to keep your money in. Explore our savings accounts and pick a plan that suits your needs.
  2. If you’re ready to start investing, determine how much you can set aside on a consistent basis. Even if it’s as little as $5, Digital Investor is a simple way to get started investing. From automated investing to choosing your own investments, we can help you reach your goals. Learn more at


Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC-registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU. Financial Advisors are employees of NFFG, and they are employees and registered representatives of NFIS. NFIS and NFFG are affiliated companies under the common control of NFCU. Call 1-877-221-8108 for further information. 

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.