THE New Year is almost here, and if you have not already made a plan to improve your financial outlook, it’s time to do so! We want you to hit January in top form, so this week we will provide ten tips to serve as a guide for you throughout the year.
1. Review what happened in 2021. From an informal survey of several working professionals which was done, only few really knew the results and performance of their entire investment portfolio and had assessed the areas of weakness, with the intention of changing or improving strategy in 2022. You can do nothing about the future unless you have gathered information from your past. Examine not only information gathered from your broker but also look at your personal behaviours and attitudes to see how they may or may not be contributing to underperformance. Research then plan.
2. Special savings are required for emergencies. The experts always recommend the building of an emergency fund which is equal to or more than three to six months (a previous article said six months. We should be consistent) of your salary placed in an account. Such savings will prevent borrowing, and it will also stop you from cashing out valuable investments in times of crisis such as hospitalisation, or a car battery that goes dead unexpectedly.
3. Master budgeting. If budgeting is a habit that you have not developed, it is time to put either fingers to keyboard or pen to paper and chart and record your monthly income and spending. It will be easier to reach investment goals if you keep track of spending and see where changes can be made.
4. Getting rid of old debt. This is another strategy which will make room for increased investments which will contribute to wealth building. There is no law which says that you should continue paying a loan for the full term allocated. In fact, early payment has the advantage of reduced interest payments. When you are debt free, put the amount into a product which will deliver returns.
5. Get advice. In developing new strategies for the New Year, a good place to begin is a consultation with your investment advisor or doing independent research in areas you want to invest in. If you are thinking of a new business to start, find others who are in the same field and ask questions. Preparedness is the basis of success.
6. Don’t be afraid of big hairy goals such as buying a new property for Airbnb rental and added income or enrolling for training that will increase your salary once completed. Do something that makes a difference.
7. Diversify your investments. If all you have at the current time are …….