If you're planning to build your financial portfolio, it's important to understand that there may be risks involved with certain investments. That's why it's important to find smart ways to spread your risks. These golden rules are designed to help you do just that.
Balance Your Portfolio With Multiple Assets
A good financial portfolio is a balanced one that allows you to spread your risk against multiple investment assets. For example, while equities are excellent from a growth perspective, you may want to balance these out with managed funds, superannuation funds and exchange traded funds. This way you can spread your risk in case a single investment avenue fails to perform satisfactorily. A financial planning professional can help you make smart investment decisions when looking to diversify your portfolio across multiple avenues. Make sure you keep up with current market conditions and know what is happening with your investment avenues so that you can make timely changes when needed.
Add Funds To Your Superannuation Account
Retirement is something many people struggle with, especially if they want to maintain the same standard of living as when they were working. A good way to build your financial portfolio is to boost your superannuation funds for the future. Voluntarily adding funds to your super account is not only a good way to build future wealth, but it can also help you save on tax. If you decide to salary sacrifice through your current employer, you can reduce your tax payments for the year. Make sure you review the fees you pay to your superannuation account every year, and find ways to reduce them if possible. If your current super account is not performing as well as you'd hoped, you may even want to consider switching it to a better-performing one.
Plan For Long-Term Growth
One of the biggest mistakes investors make is their desire to accrue wealth in the short term—resulting in rash investment decisions that cause them to lose money. A good financial portfolio is one with a long-term goal, allowing you to make sound decisions based on historical data and performance, rather than on hunches and assumptions. When working with a professional financial planner, make sure you look at both your short and long-term goals to ensure that you secure your future as stably as possible with your investment portfolio.
Follow these golden rules in your quest to spread risk when building your financial portfolio.
I got in way over my head with my credit card debt when I was younger. It's easy to think that everyone is in the same boat, holding onto big credit card balances and juggling payments between different accounts. Now I'm getting ready to buy a house and I know that I'll need to buckle down and get my credit card debt under control. It won't be easy, but the thought of no more rent inspections is very inspiring. This blog is my record of how I'm getting financial literate and tackling all of my debt once and for all.