Investment Clues to Grow Wealth
If you are fairly new to investing and looking for some guidance or even if you are a seasoned investor there are 10 basic, yet timeless investment and saving rules you should live by. By incorporating these principles in your investment strategy you should be able to build a portfolio that will make you wealthy in the long term.
- Know Your Retirement Needs
Experts estimate that you’ll need about 70% of your pre-retirement income to maintain your standard of living; lower earners may need as much as, 90%. If you are fit and healthy at 65 it is conceivable that you could live 25 to 30 years in retirement. Keeping this in front of mind will focus you on the necessity to save and manage your money carefully.
- Take the Time to Understand How Your Company Pension Fund Works
Find out how the benefit is made up. People often make the mistake of believing that all of their contribution goes to savings but in fact some of it goes to life cover. The amount you save may not be enough to cover retirement goals.
- Contribute to a Tax-Sheltered Savings Plan
If your employer offers a tax-sheltered savings plan, such as a retirement annuity, contribute to the maximum allowable figure (15% of your salary). Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you will accumulate.
- Don’t Touch Your Savings
Don’t dip into your retirement savings. If you change jobs, roll over your savings directly into a preservation plan or your new employer’s retirement plan. Try and build an emergency fund in case of calamities. This will stop you from cashing out investments and give you peace of mind.
- Learn About Basic Investment Principles
How you save can be as important as how much you save. Inflation and the type of investments you make, play an important role in how much you eventually accumulate.
- Ask Questions
Talk to your employer, your bank, your human resources manager, product provider or a financial advisor and make sure the answers make sense to you.
- Don’t Stop
Invest regularly, regardless of the present outlook for the economy or stock market. Many astute individuals have become wealthy from buying up bargain stocks or properties when nervous investors held back.
- Reinvest Earnings
Letting the power of compounding work for you. Taking out dividends or profit from your investments limits its growth.
- Educate Yourself
Keep up to date with current trends and market changes. Read all of the financial articles you come across in magazines and newspapers. Learning the language of money and how it works helps you to form a broad perspective and a greater understanding of financial issues. This helps you to make informed decisions and will steer you away from risky and fraudulent offerings.
In other words don’t put all your eggs in one basket, regardless of how carefully you watch that basket. You should spread your money across all the asset classes i.e. property, cash, stocks, structured investments (retirement annuities), fixed deposits and money market funds.
The important thing to remember is that building wealth is a process. You should establish a process of buying products that suit your goals and your pocket. If you stick to the process and keep an eye on the performance of your assets you can pretty much ignore the media hype and the short term flip flops of the markets.
Get in touch with a broker from Brolink and find out which insurance products can get money to work for you and your business.