If you don’t create a realistic plan for achieving your financial goals, it’s highly likely that not only will you fail to meet them on time, but it’s possible you’ll fail completely. Even as your goals shift during different periods of your life, it’s important to adjust your plans so you have a real chance at achieving them. We share some things to consider when crafting your plan.
This does not constitute advice and advice should be sought in all instances before acting on it.
An investment plan should consider your current financial situation as well as what you would like it to be in the future. Some things to factor in include your income, your age, and your future outlook.
The wealth you’re building can be used however you like, but it’s important to remember that investments can go up in value, as well as down. When creating an investment plan, keep in mind your goals and current needs, but don’t forget your risk appetite in order for your plan to be completely right for you. And ensure you regularly review your investments to check they’re on track to meet your goals.
Here are a few things to consider when crafting your plan.
Goals
You should always have a goal you’re working towards. While you should have short-term goals, investing will primarily benefit you in the medium and long-term. Really consider where you want your life to be in five, ten and more years’ time. And importantly, make your goals SMART.
Priorities
Investing is about the future, so be sure you take care of the present and ensure you can afford your current living costs and that can you pay down any debts. A savings cushion to cover emergencies is a good idea as well.
Investment risk
How comfortable are you with risk? How much risk are you willing to take with your money? On top of considering your other financial commitments and goals, risk should be one of your main guiding factors. There are different options, depending on where you are in your investment journey, to take advantage of your attitude to risk, so your strategy might change over time.
Timescale
Since investing is a long game, it’s best to start as soon as possible so your money has the opportunity to grow in value over time. Compounding – growth on top of previous growth – is an important factor to consider as it could make a huge impact on the value of your investments when it’s time to cash out.
Returns
Your returns on investment will depend on how much you pay in, the performance of your investments, and how long you’ve invested. In general, the more you pay in and the longer you invest, the better your returns.
Diversify
Even if you’re comfortable with some risk, putting all your money into one type of investment is incredibly risky. A diversified portfolio will help you reduce risk by spreading your money across different investments. Each type of investment is influenced by outside factors and what’d good for one type, might be bad for another. Mitigate as much risk as possible and ensure you have a healthy mix of investments.
Get started
No matter what your investment goals are, taking the time to really plan out how you’ll invest and what you want to get out of it is crucial.
At Dental & Medical Financial Services, we can help you discover what your goals are, how much you’ll need to invest, and the level of risk you’re comfortable with in order to reach your goals. We’re experts in financial planning for medical and dental professionals, so to get help building your investment plan and sticking to it, get in touch with us today.
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