Develop a Financial Plan
Always identify clear goals and objectives for your financial future. This applies to short, medium and long-term goals. Develop a plan to implement them. Without a clear plan, many things can go wrong.
Pay Yourself First
Invest on a regular basis. Regardless of age or income, you must place a high priority on the long-term investment in order to meet your financial goals.
Make sure you understand the importance of diversification. Don’t put all your eggs (or your stocks and bonds) in one basket.
Make sure you fully understand the word ‘risk’. It is more than the possibility of losing money. Risk includes such things as currency risk, credit risk, interest rate risk, risk of inflation, health risk, loss of income risk.
Obtain Proper Insurance to help Mitigate Risk
Often, people do not have insurance or, if they have it, they may have the wrong kind. This applies to all types of insurance: life, automobile, homeowners, health and disability. You may also want to consider investments that have historically provided a hedge against inflation, such as precious metals, oil, gas or real estate, which may help “insure” against a decline in the value of the dollar and protect their purchasing power over the long term.
Plan Your Estate
Don’t forget to plan your estate. Such planning can save you huge amounts of tax and family arguments.
Put Cost In Perspective
Don’t focus too much on the cost of making sound investments. There is a cost for having one’s financial act together.
Minimise Expenses – Reduce Taxes
People often pay higher taxes than necessary. By simply asking for help, this tax consequence can be decreased.
Don’t abandon your plans in times of extreme optimism or pessimism. When the market takes a leap or a fall, some investors suddenly start believing their doubts and doubting their beliefs. You should keep focused on your goals and maintain a long-term perspective—no matter what the current market conditions.
Use an Independent Financial Planner
A good financial planner can help you find your direction. They will help an individual set