Building An Investment Plan

By | September 23, 2013

Bye 2012, Wish you a happy new year, 2013!!

If you are thinking about going into investment it is a good idea to have an investment plan in place. This you will need to check that it is still focused every six months; it is not something that you create once and then forget about.

Budget

Before that you can set up an investment plan you need to know what spare money that you have available each month. It is no good to think that any money that you have left over each month will be your investment pot, this will not work. You will need to have a budget that works out the money that you need to live on and the amount of money each month that you are going to use for investment purposes.

Investment money

You might find it easier if you have separate accounts so that you are able to have an investment account, and this account is where you keep all your investment money and any dividends that you receive also get paid into this account. This will mean that you will not touch the money that you need for the month to live on even if you think you have worked out a great opportunity.

Saving

It is important that you have a means of savings that you can turn to if you are in need of an item and it didn’t form part of your budget. You do not want to touch your investment money. It is there to work for you and it can only do this if you give it the required time. Insufficient time for your money to mature and grow will impact on the return that you get.

Debt

If you have debt it is not the end of the world and it is still possible to invest for your future. But you will have to consider the implications of debt, at the moment debt will have the highest interest rates than any savings account and if you are able to pay off a debt quicker you will save more money because you will have paid back less interest. You will need to consider your circumstances, these are all individual and it will depend on many different factors as to the best move for you.

The plan

There is no ridge plan that you have to conform to but you do need to be aware of what you are investing in and how you want your money to work. Knowing what you can afford to invest and what you are looking to achieve should be addressed in your plan. Then you need to come up with a working plan on how you are going to turn your money into the amount that you are hoping to achieve, how you are going to grow money.

You will need to know at each point the risk that you are prepared to take and the amount of money that you are prepared to lose if something does go wrong. It is vital that you do not have all your capital tied up in one investment.

At the review stage you will need to consider your portfolio of investment when you are looking at your investment plan to make sure that you have a good mixture.

 

 

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