Financial Strategy by annieooi


									Financial Strategy

The secret of making money is to stay invested with a clear plan in a steady investment program.
Investment is for long term. Your financial security does not depend only within a year but an extensive
period of time. In your financial planning, set a financial goal and make strategic decision in a broad
view that your money will protect you in bad times and allow you to profit in the good times.
Nevertheless, a committed discipline is eminent to ensure a cash-rich investment portfolio; with the
following tips as outlined below.

Find Out Your Entire Financial Standing

Without knowing your exact financial status, it would be difficult to map out your long term financial
plan. First, gather all your financial history. Look at all your financial statement such as credit card
statements, your loans (example; car loan, house mortgage), you r brokerage, your bank account as well
as other investments you may have. This will give you a clear picture of your financial status; how much
are your expenses versus the income you accrue on a monthly basis.

Monitor Your Expenses And Aim To Cut Down

Inflation rate varies from country to country. If the inflation rate continues to exceed your pay increase,
so how do you increase your budget? Try to reduce your expenses. You may think that there is excess
after deducting all the essential expenses but the miscellaneous and ad hoc spending can add up to your
expenses. Usually the “hidden expenses” is to be found in your credit card statements. Take a look at
your bills which reveal some spending habits that you could cut down. Be aware of your wants and
needs and work out to decrease or eliminate them.

Do Not Mix Your Savings With Your Investments

There is a great difference between the money you save and the money you invest. Money you need to
spend for next year and next three years is saving. Money needed for an emergency also grouped in
savings which should also cover eight months of living expenses. All this money should be kept in a low
risk bank account. The purpose is when you need it; it is guaranteed to be available and is accessible
immediately. Money that is not needed to be used for at least three years is money for investing. The
objective is to allow the account grow over time and to assist finance a distant goal – building a
retirement fund. As your goal is in the future, money for investing should be put in equity portfolio as it
has the potential to generate inflation beating returns through a long term investment strategy.

Consistent Investment

Investment is for long term. Do not panic and sell your investments when the market falls. The key to
make money is to continuously investing. Regardless of how the markets are performing, continue your
investment on a regular basis by committing to a steady investment program. This economic strategy is
termed as dollar cost averaging. This connotes a regular contribution will at times buy you more units
when the market is down and on the other hand, buy you fewer units when the market is up. It is
actually good thing when market is down as you are able to accumulate more units as the more units
you have, the better the potential you make more when market rises. And over time – decades, not
months, the market rises more than it falls.
Embark On Your Retirement Fund

As a result of improved healthcare, our life spans keep climbing by three months every year. On the
other hand, the cost of living also increase which corrodes our savings. As such, we need to make
discreet financial decisions today that will lead to a long term investment return and let us live
comfortably well into our 80s.

Some experts recommend, at 30, you should have 70 percent of your investment portfolio (taking into
equity exposure of 100), while at 55, the exposure to this asset class should be pared down to 45
percent. When you retire, your portfolio should stay at about 25-30 percent of exposure to equities.
This could be too conventional as people nowadays are living longer with the support from health care.
Therefore, these percentages should be adjusted taking into consideration an individual’s financial
condition, investment horizon and level of risk tolerance.

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