Before you start, defining any goals you may have will help
you plan, budget and choose the right investments. Your goals might be around
enhancing your current lifestyle, planning for your family or your own
retirement.
The sooner you start investing, the better off you will be.
Match your long-term investment goals with your short-term lifestyle
aspirations. When you have created your goals and time frames, define your
budget. Be realistic about what you can afford to put aside for your
investments.
To help you stick to your budget, look at your cash
management and put strategies into place. It’s well worth taking the time to
think about what you really want from your investments. Knowing yourself, your
needs and goals, and your appetite for risk is a good start.
How to get started checklist:
1. Goals
Be clear about what you’re investing for. Investing is
generally most appropriate for medium and long-term goals (at least five
years). If you want access to your money before that, you might want to think
about saving instead.
2. Payments
Before you start investing, first make sure that you can
afford your essential living costs, as well as any debts. It’s also a good idea
to make sure you have some savings to cover emergencies.
3. Investment risk
Have a think about how much risk you feel comfortable taking
with your money. You should also consider your other financial commitments when
deciding how much risk to take. If you don’t want to or can’t take any risk
with your money, then investing may not be for you right now.
4. Timescale
The longer your money is invested, the more opportunity it
has to grow in value and reach your goal. Each year, not only will the money you
invest potentially grow in value, you’ll also potentially get growth on any
previous growth. This is commonly known as ‘compounding’, and over longer time
periods it can make a significant difference to the value of your investments.
5. What you’ll get back
The final value of your investments will depend on three
main factors: how much you pay in, how your investments perform, and how long
you’re invested for. Generally speaking, the more you pay in, the better your
investments perform. And the longer you can keep your money invested, the more
you're likely to get back at the end.
6. Mix it up
Putting all your money in one type of investment can be a
risky strategy. You can help reduce that risk by spreading your money across a
mix of investment types and countries. Different investments are affected by
different factors: economics, interest rates, politics, conflicts, even weather
events. What’s positive for one investment can be negative for another, meaning
when one rises, another may fall.
7. Be tax-efficient
You can do this by putting your money into your pension or
using up your Individual Savings Account (ISA) allowance.
8. Review, review, review
Make time to regularly review your investments to check
they’re on track to meet your goals.
Time to determine your investment objectives?
A sound investment plan begins by determining your
objectives while understanding any limitations or constraints that may exist.
While most objectives are long-term, a plan must be designed to persevere
through changing market environments and be able to adjust for unseen events
along the way. To discuss your options, please contact us.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF
TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS
FROM, TAXATION ARE SUBJECT TO CHANGE.
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO
DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE
PERFORMANCE.