I think I am now ready to invest. What are the things I should consider first?

A lot of people who attend our Plan Your Way To Wealth workshops ask us —Where should they put their money? How much should they invest? Do they buy property or shares or managed funds?

These are the right questions and are important issues to address. However, before even thinking about putting your money somewhere, there are a few things you need to take care of first:

1. Money Management

Proper management of your finances is of paramount importance on your quest for wealth and financial security. If you are like many hard-working Australian’s, your money comes in one shot. Usually weekly, fortnightly or monthly. For this reason, you need to adopt a strong psychology around your income and how you distribute it.

You will only ever be able to start investing or continue adding to your investment portfolio if you know how to save properly. And you can only save properly if you know how to spend properly. Creating a budget and sticking to it will be your most valuable weapon in building your wealth.

2. Emergency Savings

We cannot emphasize enough the importance of building a buffer fund before investing. This shield will protect you and your investment (be it property or shares) and allow you to manage the sneaky and unexpected expenses when they arise. (e.g.,. car repairs, medical expenses, school fees). The last thing you will want to do is sell your investment before it has reaped the reward. This can be costly in both opportunity and out of pocket expenses.

By having another fund to use in case of emergency, you will have complete peace of mind and a foundation that gives you certainty during your investments economic cycles. As a guide, a good emergency fund should be equivalent to two to four months worth of household expenses.

3. Investment Objectives

Why are you investing? Many people invest without knowing why they are investing in the first place. Knowing your goals and time frames will allow you to pick the right investment instruments that will be best for you.

One of the very first things we do is put our clients through is a Financial Health Check. This allows us to look at your exact situation. We get clear on what your financial goals are, how achievable they ‘really’ are, and what time frame you would like to achieve them in. From their, our Infinite Wealth experts will customise a strategic wealth plan that works for you and your goal, using nothing more than what you have available to you right now.

4. Risk tolerance

It is good to determine your risk appetite before jumping into any investment. Some people invest, yet they are not prepared to handle investment risks. This causes frustration that can lead to a lot of stress. Never invest without knowing the risks.

Our Strategic Wealth Plan takes into account all risks and all the appropriate protections you can put in place to mitigate those risks.

5. Time

Think long-term. There are no shortcuts to wealth creation. You need to be patient in building your wealth over time. Do not cut corners or take high-risk approaches. Put simply, do not be in a hurry as this approach can lead to many mistakes and be very costly.

Remember, investing is a marathon and not a 100-meter dash, so don’t be too hasty. You have to be patient and diligent when you invest.

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty”.