How to achieve your Savings/Investment goals
The last few years have reminded us all that managing our money can be challenging, but it’s critical to plan carefully to ensure we reach our savings and investment goals.
We’ve put together some top tips to help you get the most out of your money:
Assess your lifestyle
- What’s right for one person, including your friends, might not be right for you. Assess your budget and lifestyle to ensure you are choosing the best options for your own individual circumstances. If you are still earning, work out a comfortable amount that you can save without impinging on your lifestyle or not enabling you to cover emergencies, or an impromptu trip to see family. If you’re retired, do you need an income from your money or does your pension pot need to simply accrue value? Consider your age/earning or retired/amount of capital to invest and likely future needs.
- Your investment decisions must give you peace of mind as well as a good return. This means you need to consider your appetite for risk. In its simplest form do you need to grow or protect? Someone who is earning, relatively young and saving for their retirement will opt for the growth option whereas someone who is near to retirement or retired needs to protect their wealth as it will be a lot harder, if not impossible, to replenish. It goes without saying that the possibility of greater returns inevitably comes with the possibility of greater losses. Also consider your personal attitudes. If you’re going to spend your whole time worrying every time you hear the stock market has dropped a few points, then it might not be worth it.
Diversify – Diversify – Diversify
- Remember to diversify your portfolio. Putting all your nest egg into one basket is potentially risky. Diversify so that if one asset goes down, another will hold its value or perhaps even rise. Bank deposit accounts with reputable banks are relatively safe options for your cash.
Have Short, Medium and Long term options
- Establish short medium and long term options for your money. Even if you are not near to retirement and have a good pot to invest and a healthy attitude to risk, you still need to ensure you have a diversified portfolio that allows for cash for emergencies, and medium to long term investments.
Short: ie ‘liquid’ cash that is easily accessible in an emergency. The returns will generally be lower and you shouldn’t take risks as there won’t be the time to recover from market fluctuations.
Medium: Perhaps be a bit more adventurous in your risk, depending on what impact a bad turn could have on you. It’s about your risk tolerance.
Long: You can afford to leave your money, perhaps take a little more risk, if you are still earning. Be careful of penalties if you need to take your money out early. You don’t want to tie your money up in long term investments and then find that you don’t have enough cash to be able to maintain your lifestyle or cover emergencies.
- Don’t forget to periodically reassess. Markets change, products alter and your circumstances might also differ from when you initially designed your investment portfolio. Remember if you put off dealing with your investment decisions then you could be losing money. Savings accounts which had offered attractive rates when you opened them might now be offering very poor returns. Getting even 1% more on interest rates could result in you being hundreds if not thousands of pounds better off in the long term, so make sure you periodically set reminders to check on how your money is doing.
Seek Independent Advice
- Skipton International doesn’t offer financial advice, if you need help in deciding what you should do with your money then seek out an independent and accredited financial adviser.
Skipton International does offer an attractive range of offshore savings accounts. We also offer transparent customer service which means that we won’t offer attractive rates to attract you in and then quickly reduce those rates. Plus we promise to always inform you of changes to your account.