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Ways to Grow Your Wealth

Oct 12 2011

Graph showing the rate of a $1000 initial inve...

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Ways to Grow Your Wealth

Building your wealth and making your money grow is a goal many people strive for and there are a number of approaches you can take to make this happen. Investing is one of best ways of growing your wealth and there are several options available to you to help you get the best return for your money.

Why Invest Your Money?

Investing your money can bring financial security in addition to increasing your wealth and creating an additional income stream. Investing wisely can bring you a better standard of living or the disposable income for the car or house of your dreams, a much needed holiday or can offer you the opportunity to support a cause you are passionate about.

While the benefits of investing are many, it’s important to plan your investments properly in order to grow your money for the right reasons. Growing your wealth simply to gain more money is fine but growing your wealth with a specific purpose in mind is much more satisfying.

How to Grow Your Wealth

Most people start off keeping their money in a savings account or term deposit and while this is certainly a great way to create a savings and investment habit, if you are serious about growing your wealth you will need to consider other investment options.

When considering investing, take the time to plan your financial goals as this will have an impact on the type of investment you choose. You can choose a short-term, medium-term or long-term investment option to suit your goals and situation. For example, if your long-term financial goal is to create enough wealth to allow for a comfortable retirement, then a long-term investment would be the best strategy for growing your wealth to meet this goal.

When Should You Start to Invest?

With the right plan in place, you can begin investing at any age. If your current income is enough to not only meet your basic expenses but also allows you to contribute to a savings plan, you should be in a position to begin investing for a better future. Optionally, you may have inherited money from a relative or received a lump sum settlement as a result of an accident or injury (these types of incidents tend to involve no win no fee personal injury lawyers) and your goals may be to to diversify risk to plan for longer-term financial security. Both of these situations are good investing scenarios.

On the hand, if like many people, you have existing debt obligations, investing should be put aside until you are able to clear these financial obstacles. High credit card interest and mortgages take a huge chuck of income and often leave little to extras, let alone a savings plan. In these situations, it is better to focus any additional money you have on reducing the principle of your home loan and reducing your credit card debt than trying to save for investments. By taking care of your debts first, you will be in a far better position to save and create an investment portfolio in the future.

As the old saying goes ‘it takes money to make money’ and you cannot grow your wealth when your wealth is needed to remove any debts from your life.

How to Invest

If you are in a position to make investments, be aware there is a lot to learn, especially if you are a beginner. Researching the various investment options available to you is the first step in your wealth creation plan. Knowing how and when to invest and manage those investments takes knowledge. If, after researching your options, you are still not sure what to do, speak to a financial adviser or investment broker for more advice on the best strategy for you.

Learn about Risk and Return

When you reach the point of being ready to invest your hard earned money, be sure to spend some time to look at what your investment can earn or cost you. With every investment there will be risks but when properly planned the possible returns will and should out weight the risk involved. In the beginning, an investment broker or financial adviser can advise you on the ‘safest’ investment strategies which will provide a good return for little risk. As you gain experience and knowledge in investment strategies, you will be to handle this judgment on your own.

Investing can be an emotional experience and keeping your emotions in check is important if you want to successfully grow your wealth and build a profitable portfolio. When seeking the advice of others, be carefully of being affected by ‘gurus’ or friends and family. People such as these generally try to influence your decision-making by evoking an emotional response. Do your research and only take advice from a knowledgeable source.

Your Investment Options

As mentioned, there are numerous investment options available including cash investments (such as bank accounts, term deposits and cash management accounts), the stock market, and real estate. The investment option you choose will depend largely on your financial goals and the length of time you are willing to wait for a return.

Planned properly, investing is a fantastic way to grow your wealth and create an alternative income stream that allows you to like comfortably, both now and in the future. If you are largely debt free and have surplus money, explore the investment options available and start growing your wealth today.

Article contains two in-context links to a reputable law firm.

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