Connect with us

Economy

Setting Your Money Goals

Published

on

Hand of male putting coin in jar with money stack step-Money Goals-SS-Featured

You may be wondering what is the right investment strategy for you, but without knowing anything about you, any advice on which investments are right for you may in fact be the wrong ones. There are basically three factors that determine which are the right investments for you, they are:

RELATED: How To Look After Your Money

3 Factors that determine your investment strategy

1. Your age

Different people young and aged multinational employees sitting around table in conference-age-Ss

Starting with your age. It would be rather silly of you to invest all your money in growth funds if you are aged 65 because if the market takes a dive such as was the case during the 1987 sharemarket crash and to a lesser extent, the Global Financial Crisis during the early 2000s you have less time to recover from these setbacks whereas the young ones have time on their side.

2. Purpose for the money

Plant growing in Coins glass jar with investment paper label for money saving and investment financial concept-purpose of money-ss

The purpose for the money is the second factor.

Decide whether you require the money in the short-term, medium-term, or long-term.

The short-term would be up to a year.

Raven_Steel_Ad-V2
Raven_Steel_Ad-06

Medium-term is 1-5 years

Long-term is longer than five years

Short-term expenses would be, a bank account for emergencies, a holiday within a year, dental expenses, or t pay for the kids schooling for a year.

Medium-term would be saved for a car.

The long-term would be your retirement fund, saving for a house deposit, or saving for the trip of a lifetime.

3. Your risk profile

Financial risk assessment _ portfolio risk management and protection concept-Risk-ss

Your risk profile is a determining factor in where you invest your money. If the thought of the sharemarket taking a dive will give you sleepless nights then investing in growth stocks in the share market is not for you. A better option would be managed funds where you will be given a choice between growth, balanced, and conservative funds.

It is important not to get into debt for there is a cost to debt and that is interest. Interest adds to the cost of goods bought with borrowed money, and this adds up to a fortune during a lifetime of borrowing for consumables. This is called bad debt because the value of the item declines over time.

There is such a thing as good debt though and this is your first home because the value of the property increases during the lifetime of the loan but even this is not always a good option for some people if you live a kind of transient lifestyle.

“Everyone is to their own,” so only you know what makes you tick so your personal circumstances are the determining factors that govern where best to invest your savings.

You must do your homework before you invest in anything, whether that is the sharemarket, managed funds, or gold. There is so much information available on just about everything, and that includes finance. It is just a matter of learning the ropes and having a financial strategy that suits your personal circumstances.

Most people are able to save money but having goals and selecting the right investments for your savings can help increase your assets and enable you to reach your goals quicker. In life one size does not fit all as far as deciding where to invest your money. My site has several finance-related articles, visit: http://www.robertastewart.com

You Might Also Like:

Keep up to date with the latest finance news by following us on Facebook and Instagram.

Article Source: http://EzineArticles.com/

Click to comment

Leave a Reply

Your email address will not be published.

Continue Reading

Subscribe To Our Newsletter:



Copyright © 2020 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.

[email]
[email]