Research shows that most investors fail because they lose sight of the reason they put the money aside in the first place, not because they chose the wrong investment vehicle.
To cure this, the emerging approach is a shift towards goal-based investing to prioritise purpose over product to build lasting financial resilience.
The core principle is to define the outcome first, then determine the contributions required and the level of risk for the desired outcome for that time.
For example, if you have 10 years to invest, your strategy will be less aggressive than if you only have five.
In practice, this means mapping short-, medium-, and long-term horizons and setting a target rand amount for each.
“This makes the objective more tangible to stick to. This approach helps people move beyond the indecision that often comes with too many choices,” says Cassidy Nydahl, head of growth at Franc App, a goal-based platform for saving and investing.
“Once a goal has a time frame and a number, the asset mix follows naturally,” Nydahl said.
“A holiday planned for next year requires capital preservation and daily liquidity, making a money market allocation the logical choice.
“Conversely, a home deposit needed in five years can afford to take on some equity exposure to achieve greater growth over time.
“The result is fewer second-guessing moments and less temptation to chase whatever investment is trending on social media. The fundamental rule is that the plan fits the goal, not the other way around.
“Even though a clear goal gives you something to aim at, the real shift happens when you understand how much risk you can take and how long you have to reach it.
“This alignment of time, risk, and purpose builds investor confidence and removes the pervasive fear of getting it wrong, which is one of the biggest psychological barriers to entering the market.”
To avoid good intentions colliding with the three common obstacles to saving, such as decision fatigue, a lack of willpower, and the isolation of saving alone and coming second, you will need the following practical steps:
• Automate contributions
If a debit order deducts R100 on payday, the decision has already been made, protecting the plan from month-to-month trade-offs.
• Build accountability
Savings challenges create light social pressure, a dynamic that Franc’s “Shared Goals” feature leverages. It allows up to 10 people to contribute to a single goal with complete visibility into deposits, turning good intentions into shared habits.
• Start at a lower threshold
Beginning with small amounts and increasing them later makes the process less daunting. For this purpose, Franc has no minimums to start investing on its platform.
Nydahl suggests visualising a wealth plan as a champagne glass tower once you overcome these barriers. “The top glass must fill first,” she explains, referring to emergency savings.
“This is the buffer that keeps a bad month from derailing everything else. Once that fund is healthy, the contributions can flow over to the other glasses – the various goals – according to their priority.”
She says that the allocation for each goal is determined by its timeline.
“Cash-like instruments remain the preferred choice for short-term horizons, while diversified equity is the preferred choice for longer-term goals.
“This structured picture helps investors decide what to fund now, what to pause, and what deserves more risk because there is sufficient time to recover from market fluctuations,” she says.
Looking ahead, Nydahl says Franc is further developing this personalised guidance.
“We are currently working on developing a digital wealth coach to help users define a plan across products, choose suitable strategies for each goal, and build the habits to stay on track,” she said.
The idea is to create a guide that can be adjusted as life changes, keeping the focus firmly on the goals.
She says the path to financial security does not start with picking a fund but with naming a dream and then creating a plan that fits it perfectly.
