Financial gurus try to sell the secrets of successful investing when all you really need is some common sense and a blueprint that suits your personal circumstances to work to.
Paying thousands of pounds for courses just puts your hard earned cash in someone else’s pocket and leaves you with less to invest.
And there’s always that nagging thought that if the gurus are really so good at investing, why do they need your cash?
With that in mind, here are some tips for better investing – for free:
Benchmark where you are
You map a route if you don’t have a starting point. For investors, this benchmarking includes calculating what savings you already have, having some idea of your projected retirement age and a realistic idea of how much you can put away and how often.
Don’t forget tax and inflation
Both of these can affect savings and spending – the general annual inflation rate to build in to your saving plans is a rise in the cost of living of 3% a year.
Risky business
All investment involves risk and the higher the return, the greater the risk is a rule of thumb.
The highest returns come from unregulated investments, which offer no safeguards.
The lowest risk comes from fixed return savings and bonds that offer a guaranteed income.
Set investment goals
Think about what you want from your investments. This could be a retirement income, growing your wealth or planning to pass your wealth on to your family or loved ones.
Just as you need a starting point for your investment trip, it’s a good idea to have a destination in mind as well.
Diversify
Diversification is about splitting your cash across different types of investment, so if one market falls, another takes up the slack and you do not lose the lot.
Don’t panic over short term falls, world markets are volatile and subject to sharp rises and falls. These should balance in the long term.
Don’t invest and forget
Review your investment portfolio regularly to make sure you are on track to your financial destination.
Lastly, this is not an investment tip but don’t spend so much time and effort planning for tomorrow that you forget to live for today as well.
