Ready to invest?
If you’ve got some spare cash, chances are you’re depositing it in a savings account. That’s a smart move but there is a whole world of investments available that can grow your wealth, help you achieve your goals and provide additional money to live on.
Your financial adviser can recommend a suitable portfolio of investments tailored to your needs, and to do this we focus on some key issues.
How do you feel about risk?
Before you begin looking at different investments, it is critical to understand your views on risk. That’s because one of the basic rules of investing is that higher returns come with higher risk.
This risk/reward relationship makes it important to choose your investments with care, and it’s an area where we can offer expert advice. Ideally your portfolio should combine both low and higher risk investments but the exact blend is a very personal choice that should reflect your long term goals.
What are you aiming to achieve?
A second key step is to understand the goals you are working towards. Some investments, like shares and property, deliver their best gains over the longer term, often 7-plus years. So you need to be prepared to hold on to these types of investments for an extended period.
Having a clear idea of what you want to achieve through investing can shape the mix of assets that is right for your portfolio.
Of course, your goals may change as you move through different life stages. So your portfolio shouldn’t be a “set and forget” matter. We take the time to review your portfolio at least annually to be sure it continues to reflect your needs and aspirations throughout your life.
Taking tax into account
The impact of tax varies between investments. Some, like cash-based assets including savings accounts and term deposits, pay interest returns that are fully taxable. Others, like shares and an investment property, can be very tax-friendly.
Understanding the impact of tax on your portfolio is essential. The assets you choose and even whose name your investments are held in, can play a role in how much tax you pay on your ongoing returns, as well as any profits made when you sell an investment (known as capital gains).
Your Mortgage Choice financial adviser takes the time to understand your lifestyle and financial position to develop a tailored financial plan that can help you build wealth through investing.
It doesn’t need to take a lot of money to get started but by steadily growing your portfolio you’ll be on track to build financial security and start achieving your personal goals.