Everyone needs a plan when it comes to investing your money, you know that they say “Plan your life, live your plan”. Developing a plan for investing your money involves developing strategies and choosing the right investments.
When developing your investment plan start by gaining an accurate picture of our current financial situation. Work out what you own, what you owe, and current income and expenditure. This will give you an overview of your current financial position. Once you’ve mapped out your financial situation, start writing down your goals and give them times frames. These goals will become the backbone of your investment plan. Creating goals and assigning them time frames will keep you accountable.
Risk is a part of everyday life and just like anything in life there is risk behind developing an investing plan. You need to understand just how much risk you’re willing to take to achieve those goals. There may be small to larger potential risks behind your investment plan.
Planning your investments around your identified goals should consider both the short and longer term investment time frames. Short-term goals (1-3 years) – if you’re planning for a short-term goal such as saving for a house deposit there are a few steps you might consider to help reach that goal quicker. These include:
– Paying off credit cards and personal loans first to free up additional cash to save.
– Save a fixed amount each pay.
– Choose a cash investment with good security and easy access such as a high-interest savings account or a term deposit.
Depending on your identified goals, you may need to incur some additional risks to achieve them. Higher risk strategies are better suited to the medium to long term investment time frame, as it allows you to withstand short term volatility in the markets. This includes investments in direct shares or managed funds. It also provides a greater period of return to assist in recouping upfront costs that may be incurred if investing in direct property.
A well thought out and developed investment plan will outline your future needs and goals and identify your preferred strategies for achieving them.
If you would like any assistance on developing an investment plan for your circumstances please contact Grange Business Partners today – Happy planning!