It is the classic piece of financial planning advice: Spend some, save some.
It’s advice that’s difficult to argue with; making sure that you have an emergency fund, a bit of spare cash for that much lauded ‘rainy day’ or ensuring that a dream becomes a reality; and once that capital is created, many people seek to invest it; to make it start working for them, to turn that money into more money, to make a return.
Successful investment planning starts with a dream; a ‘goal’ if you like. Before investing any money, a simple question must always be asked: what do you want to achieve from your investment and when? Is it to supplement retirement or to fund school fees or higher education? Is it to provide growth or income? Or is simply to preserve the value of your money in real terms against inflation?
From there it is possible to calculate what growth is needed for your plans to come to fruition; but this is only half the process.
For once goals, timeframes and desired growth rates have been identified it is important to understand ‘risk’. As a rule of thumb, the more risk you are willing to take with your money the higher the potential for return; but it goes further than this, for you must also consider how much you can afford to lose in the event of things ‘not going to plan’. It may be that you are not willing or cannot afford to take the risk necessary to achieve your investment goals; it may be necessary to think again, to downsize your thinking, or to invest more money.
Investing money wisely requires consideration, understanding and constant care and vigilance.
This is why, when making investment decisions it is important to take appropriate wealth management and financial planning advice; to help you identify your goals, ascertain timeframes and required growth rates, understand your position in relation to risk and ultimately, to select the investment vehicles appropriate to both your needs and tax position. Then it is all about regular review, ensuring everything remains ‘on track’ to achieve your ends and that your investment strategy remains appropriate in the face of any legislative developments and changes in your life, positive or negative.
English Mutual Financial Planners, aided by market leading risk profiling tools and award winning investment management, are able to help you make not only the right investment decisions but also achieve your objectives; to create the right balance in your portfolio, to deliver the performance you seek with no unnecessary risk.
If you would like to find out more click here to arrange an appointment with an English Mutual Financial Planner.