Top 5 Tips on how to start building wealth early and maintain it

Navigating the complex world of investing can be daunting, but with a clear strategy and a long-term perspective, it can be a powerful tool for achieving your financial goals. In her article, Kate Townsend outlines key principles to consider when investing for the future including setting clear objectives, creating a tailored plan, understanding risk tolerance and maintaining a diversified portfolio

1. Have a goal.

The goal itself is less important than having something solid to work toward. Some investors may aim to retire more comfortably, some to buy a new home or to create intergenerational wealth. However ambitious the goal is, having a clear idea of what you want to achieve can provide structure and even set a rough time horizon for success.

2. Create a plan

Once an investor has a goal in mind, it is possible to put a plan in place to achieve it. While a simple budgeting plan may be a good place to start, seeking the services of an experienced Financial Adviser can be invaluable. After all, your circumstances and goals can change over time, and an Adviser can help you financially and emotionally navigate the more challenging financial decisions that will inevitably occur.

3. Consider the Risks

Again, advisers are well equipped with the tools to judge your risk-taking tolerance. However, it is crucial to consider your individual tolerance to risk. Remaining invested throughout the market’s various gyrations is incredibly important but can be more difficult if your investments take a level of risk you are uncomfortable with.

4. Diversification is Key

When investing for the longer term, it is essential not to put all your investment in one asset class (cash, fixed income, stocks, or property), one region, or even one sector. All investments come with their own potential opportunities and risks, and holding a more diversified basket of assets can offset some of the more extreme moves of individual assets.

5. Don’t Panic

The most notorious emotions that will inevitably affect any investor are fear and greed. Panic selling during a downturn or buying into the latest hype cycle is rarely the most sensible approach. While the volatility of markets can be uncomfortable, if you have considered the previous tips and spoken to an adviser, you should be well-positioned to remain calm and let your investments work for you.

Kate Townsend is an Investment Analyst, IBOSS, part of Kingswood Group