Making A Plan For Investing Should Consider These 6 Key Items (& Professional Advice)


Investing can seem intimidating but creating a plan will help you find the right investments for you and your financial situation.

Review Your Finances

Work out what you owe (debts) and what you own (assets). Assets could include your super, home, savings, and other investments. You should then identify your income and expenses. Understanding all of these will help with determining how much money you can regularly put aside to invest.

Set Your Financial Goals

Determine what your financial goals are and have a practical estimation for how long it will take to reach them. Your goals should be divided into 3 main categories: short term (0-2 years), medium term (3-5 years), long term (5 or more years). This will help you pick the right investments.

Understand investment risks

All investments have risks – some more than others. Assessing potential risks of your investments can help you decide which investments are right for you.

Generally, the higher the expected risk, the higher the expected outcome (and the lower the risk, the lower the outcome). Lower risk investments will yield low and stable income over time. There are no investment options which are both risk free and will yield high investment.

Research Your Investment Options

For each investment option you should consider: return, time frame, risk, access to cash (liquidity), cost to buy and sell and tax. You should have realistic expectations about what returns you will yield from your investments – if an opportunity seems to good to be true, it could be a scam.

Build Your Portfolio

Aim to create a portfolio that contains both short and long term investments with a combination of risks. This is known as diversifying your portfolio. It protects you from losing too much money if the value of one investment falls. You won’t have a diverse portfolio from the start, but keep that goal in mind.

Monitor Your Investments

Keep an eye on how your investments and the market is performing regularly. This can help you make better decisions if you wish to continue investing.


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