Planning is essential for successful investment. Carefully planning leads you to find investments that fall in line with your financial goals. If you are looking for lucrative returns on your investments, the first step would be to review your finances.
While reviewing your finances, you need to consider your debts and assets, which will give you a clearer idea of the savings you can invest. The next step is to check your monthly expenses and income, and you will know whether your financial situation permits you for big one-time investments or small monthly investments.
Risk and Return:
Before you research all the investment options, you should set your short-term (0 to 2 years), medium-term (3 to 5 years), and long-term (over 5 years) goals. The general rule is when the expected return on investment is higher, the risk on investment will also be higher.
To be a safe investor, you should know your risk tolerance. The risk tolerance is different for every individual investor. It is based on their ability to handle a downfall in the value of their investment. If you are not prepared to see the value of your investment drop off by 20%, then you should avoid high-risk investments.
Research Investment Options:
To find the best investment options, you need to consider the following points:
Return:
Learn about the return, whether it will be in the form of income or capital gain.
Time Frame:
How long you will need to invest before you achieve expected returns.
Risk:
Know the risks associated with your investment and whether you can take them.
Access to Liquidity:
The time that your investment requires before you can take out your cash.
Overall Cost:
Whether it will cost you to sell your investment, consider the buying and selling costs of the investment.
Tax:
Know how much tax you will require to pay on income or capital gains. (Check Resident tax rates 2022–23).
Monitor Your Investments:
Regularly reviewing your investments will help you know about the performance of your investments. It will help you make necessary changes in your investment if needed to reach your financial goals on time.
Get an Expert’s Help:
SMART Financial Advisory provides comprehensive solutions to your effective financial planning needs. We work with you to help you achieve your financial goals with our range of services, including tax planning and advice, investment planning, insurance planning, retirement planning, business protection, estate planning, SMSF, and more. Whether you are looking for early retirement or looking for business growth opportunities with safe investments, kindly get in touch with us for a reliable solution.