The famous American baseball player, Yogi Berra, once said “If you don’t know where you are going, you might wind up someplace else.”
Another famous American writer, philosopher, scientist, politician, inventor and publisher, Benjamin Franklin, said: “If you fail to plan, you are planning to fail!”
Your first step as an investor should be to plan where you are going with your money, what you want to accomplish, and when you want to accomplish it.
You may have many financial goals – to buy a car in 2 years, to help pay for your family’s education in 5 years, to prepare for your retirement in 10 or 20 years. You might already be retired and simply want your money to earn a reasonable return and provide a reliable source of income for many years to come.
Many retirees get their superannuation payment when they retire and then spend it or give it away very quickly leaving them with little or no money for the future.
Whatever your situation, take a few minutes to sit down and think about where you are now financially and where you want to be in the future.
Here are some questions to ask yourself to plan. It’s worth writing down the questions and answers.
- Have I done a budget of my income and expenses?
- How much money do I have?
- How much money do I need for day to day living?
- How much money do I need each month and how much does that change from month to month?
- How much money do I have to invest now? How much can I save each month?
- How secure is my housing?
- How secure is my employment?
- Will my employment income allow me to invest additional money in the future? How much?
- Do I have any valuable assets that can have an influence on my financial future?
- Do I have any assets that may need replacing or repair (for example, a car). When and how much will it cost?
- Do I have any debts which I need to pay off? When and how much?
- Do I plan to make any major purchases in the future? When and how much?
- How many family members (parents, children, brothers, sisters) do I have to care for and what are their future needs?
- Do I have superannuation and when can I access it?
- Do I expect to inherit any money in the future?
- How much money do I need to put aside in case of emergency
The answers to all these questions are matters you can discuss with a stockbroker to plan your future investments. This helps you and the stockbroker understand your current situation and your future needs and expectations.
No two investors are exactly the same. If you are young, you might be prepared to take more risks over a long timeframe. If you are older, you might want to take less risks and keep your money safe over a short timeframe. If you are retired, you might want to take very small risks and get a regular income while still investing something to help your family in the future.
To invest successfully you must think through your situation and your objectives so that you take an appropriate level of risk.
The information in this article is general in nature and you should take care to inform yourself about the specific characteristics of a particular investment before making a decision to invest in it. PNGX recommends discussing your investment objectives and needs with a stockbroker or qualified financial adviser. In PNG, you can either contact JMP Securities Limited (enquiries@jmpmarkets.com) or Kina Securities Limited (wealth@kinabank.com.pg).
By following these articles and reading the information available on the PNGX website (www.pngx.com.pg) or following PNGX on LinkedIn or Facebook you can learn more and build your wealth by investing in PNG.
