5 Things Every Investor Should Know
How many investors achieve what they really want? I would suggest it’s quite a low number. Why is this? It’s probably because most don’t have a good long term plan that they regularly monitor and adjust.
What is it that you want to achieve? Is it wealth, freedom, time? Your investments are a vehicle for you to achieve your life goals. They are not the goal itself. When you are clear on the big picture it makes it easy to work out what you need to do to achieve those goals.
What is your timeframe? Sometimes this is linked to your age and retirement goals. Or it might be something along the lines of getting yourself into a position where you only have to work four days a week. Having a timeframe helps you keep focused. I have always found it helpful to have both short and long term goals. My short term goals are steps that I work on so my long term goals are a reality and aren’t some elusive ideas that never seem to manifest.
There are many different types of investments that can help you achieve your financial goals. Part of your decision making process needs to include your risk profile and how involved you want to be with your investing. For example, using an investment advisor to manage your investments is usually a lot less involved and time intensive than say owning an investment property that you manage yourself.
Your financial goals are all about the numbers. A really important thing to understand here is that you don’t need to be a financial whiz to keep track of your wealth. A simple calculator and basic spreadsheet or notebook will do the trick. Write down a list of your investments, update it at least annually and track how the values grow. Then match this with your financial goals. There are calculators on www.sorted.org.nz that can help.
The smartest and most financially successful people I know have a really good team of professionals around them to help them along the way. Rarely does the good old Kiwi DIY mentality help you become financially successful.
By Lisa Dudson