Financial Planning

How to Invest Your Money to Grow Your Wealth

March 18, 2021

Revealing the 5 Golden Rules of Investing You Must Follow for Success.

Planning and choosing your investments to reach your financial goals is easier said than done.

Whether you are just starting on your investment journey, looking to diversify your portfolio, or planning for retirement, it can be difficult to know where, when, and how to pick your investment products.

However, with planning, research, and professional advisors by your side, you can be confident that you are on the right track.

The best way to make the right investment decisions – the kind that will help you achieve security and financial growth – is through knowledge.

The knowledge of different investment options and diversification to protect your money is key to growing your money.

Should you invest in shares or bonds? Property or managed funds?

The truth is, there is no right or wrong answer.

Rather than one strategy or investing in a single asset class, a comprehensive investment plan is a far more thorough and researched option.

 

What is Investment Advice?

According to financial education global leaders Investopedia:

Investment advice is any recommendation or guidance that attempts to educate, inform, or guide an investor regarding a particular investment product or series of products.

 

An experienced financial advisor can provide you with investment value by helping you:

  • Set your financial goals
  • Work out your risk tolerance
  • Choose the right investments
  • Make the most of your money
  • Protect your assets

When it comes to your investment strategies, there are five golden rules to success, the very same rules we use to create unimaginable success for our clients.

 

Rules to Live by: the 5 Golden Rules of Investing:

1. Know Your Goals

The first step to your investment plan is to understand WHY you want to invest. This also includes deciding on your timeframe to reach your goals.

Do you want to create more money? Or protect your wealth and secure your income in retirement?

Your financial goals will determine the details of your strategy. Think about your current financial situation and compare it to where you would rather be. This will help you drill down on your objectives.

 

2. Understand What Risks You Are and Aren’t Willing to Take

Risks tend to be the boring part of your investment plan, but they are essential to your success.

 

“Investment risk is the likelihood that you’ll lose some or all the money you’ve invested. This can be due to your investment falling in value or not performing how you expected. All assets carry investment risks — some are riskier than others.”

 

Moneysmart.gov.au

 

To find out how much risk you are willing to take, ask yourself before committing to an investment: How would you feel if the value of your investments dropped 30%? How about 20%? Or 10%?

Keep changing the percentage until you feel comfortable. Then you can match your investment choices to your personal risk profile.

 

3. Don’t Put All Your Eggs in One Basket

The first question you may ask yourself when deciding to invest is, “Where do I invest my money?”

With so many different asset classes to choose from, this decision can be a little overwhelming.

This is where the idea of diversification comes into play.

The aim is to diversify your investments; in other words, to invest in different asset classes. This way, if one investment drops in value, you will be protected by your other investments.

 

“If you’re a millionaire by the time you’re 30 but blow it all by age 40, you’ve gained nothing. Grow and protect your investment portfolio by carefully diversifying it, and you may find yourself funding many generations to come.”1

 

4. Time in the Market is Everything

The important part of any investment strategy is: Your time IN the market, rather than trying to time the market. 

Trying to time the market leaves you with two decisions to make:

  1. When to get in?
  2. And when to get out?

Predicting both of these accurately is near impossible. Our view is, the long-term investor with a plan stays the course through market cycles, and makes sure they are ‘in the market’ through the growth phase.

The amount of time you spend in the market on your investment journey is the key to your success. The best time to start investing was yesterday and the second best time is today.

The sooner you start, the more opportunity you’ll have to growth your wealth. It’s that simple.

 

5. Check-in with the Experts

When it comes to your investment strategy, you should never go it alone.

Seeking advice from a professional financial advisor will ensure you are on the right track to success.

An investment strategy is an integral part of your overall financial plan and identifying a long-term plan could be the key to your financial success and future security.

Cambio Group is a full complement financial services group with a team of CPA-qualified advisors ready to secure your future with a tailored investment strategy.

It’s never too late to start investing in your future.

Ready to start today? 

Contact us to request your complimentary investment strategy session with one of our experienced financial planners.

 

1 Forbes: Top 100 Money Quotes of All Time. https://www.forbes.com/sites/robertberger/2014/04/30/top-100-money-quotes-of-all-time/?sh=64662a7a4998

Disclaimer: The information (including taxation) in this website does not consider your personal circumstances and is of a general nature only – unless otherwise stated. You should not act on the information provided without first obtaining professional advice specific to your circumstances.

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