Time Horizon
Time horizon is how long your money can stay invested before you need to use it.
Why this matters
Longer horizons usually allow more time to recover from downturns and benefit from compounding.
Simple example
Money for retirement in 30 years can usually take more risk than money for a house in 2 years.
Common mistakes
- Using aggressive assets for short-term goals.
- Ignoring when cash will actually be needed.
- Treating all goals as if they have the same timeline.