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6 Essential Considerations Before You Start Investing

6 Essential Considerations Before You Start Investing

Investing is one of the most effective ways to help you create wealth. However, there are so many options that it can be overwhelming to start investing. If you want to be better prepared when it comes to building wealth, here are some considerations to keep in mind.

Before You Start Investing…

1. Start with an Investment Plan

Investment planning is the first step to your investment success. An investment plan will help you have a clear vision of where you are going, what you are investing for and what you need to do to accomplish your goals. It will also help you to stay focused and motivated.

You can use this MoneySmart Savings Goals Calculator to get started.

2. Decide on Your Preferred Timeframe

The investment period is one of the most important factors to consider. It is essential to know what you can afford to do and how long you’d like to commit to your investments because the investment period will affect how you can invest.

For short-term goals, lower-risk investment options are better as they’re less likely to fall in value and you can access your money. For longer-term goals, investments with higher returns may be better. As you’re investing long-term, you can ride out any short-term falls in value.

3. Think About Your Risk Tolerance

Risk tolerance is one of the critical factors to consider when investing. You need to know how your market conditions, economic conditions and other market factors affect you. You should also know if your investment assets will lose significant value if the market conditions worsen.

Different people can tolerate different risks. If you have a high tolerance for risk, you may consider investing for the long term. However, if you are not so tolerant of risk, you may consider investing in short-term investments with relatively low risk.

4. Consider Where to Invest Your Money

You need to know where to invest your money. There are numerous options, and choosing the best one may be challenging. Anytime you want to invest, you should first know your options.

Before you decide where to invest your money, you might want to consider if you want your money to be liquid or not. This means you need to know if you want your money to be easily accessible when you need it.

It’s also important to decide whether you are looking to align your investments with your values, aka ethical investing. ESG investing is when a fund considers sustainability (including environmental, social and governance factors) to inform its investment strategy.

5. Diversify Your Investment

Investing can be risky. If you put all your eggs in one basket, you can lose your money if the investment fails. Investing should be a way to help you build a nest egg for the future. Thus, you should make sure you have a variety of investments.

Even if you plan to invest for the short term, it is still a good idea to have a variety of investments. This is because the conditions can quickly change. It makes sense to have a parcel of investments that can help you earn returns even if the market is not doing well.

6. Consult with Professional Financial Advisers

While you can make your own investment decisions, it does not mean you should do it independently. If you want to take advantage of professional help, you should consult with an accredited financial adviser as they can help you to make the best decisions for you and your goals.

Ready to Invest?

Investment is essential to help you create wealth and to secure your future. The investment choices you make will affect your lifestyle choices in the future. If you want to make the most out of your investment, you need to know how to choose the right vehicle.

Make better investment decisions by working with the experts at Newcastle Financial Planning Group. With your dedicated wealth adviser in Newcastle, you can achieve your wealth creation goals according to your risk tolerance, time frame and financial circumstances. Call us or book online to secure your first appointment with us today and get started!



  1. https://moneysmart.gov.au/saving/savings-goals-calculator
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