While investing is often a good approach to managing your long-term finances, it isn’t for everyone. Before you invest, it is important to take the time to assess your financial circumstances, your financial goals and your level of income. From there, you can decide whether it is the right time for you to commit to an investment plan. Here are a few things you might want to consider.
1 – Your Income
First and foremost, does your current income cover all your existing outgoings? And how much money can you afford to put aside after living expenses? Before you invest, you need to be sure that you can live comfortably without that money. That means being able to afford your food, your bills, your rent or mortgage repayments, as well any additional expenses.
2 – Your Savings
Once you have looked at your day-to-day outgoings, you also need to consider how much money you already have in savings. Is there enough to cover any unexpected expenses? Could you cope with a sudden influx of bills? Before you invest, ideally you should make sure that you have money put aside as an emergency fund. After all, you never know when you might need a little extra cash.
3 – Your Debts
The next thing to look at is your existing debt. While investing comes with lots of opportunities, there is also a certain level of risk involved. If you are worried about your debts, you need to consider whether now is the right time for you to invest. Debt management should always be a top priority and you should only ever invest money you can afford to lose.
4 – Your Insurance
While everyone hopes for the best, it is sensible to have plans in place to help you and your family cope financially should something bad happen. Do your regular expenses include health cover and life insurance? If not, it may be worth looking into additional insurance options and including these in your outgoings before you start investing.
5 – Your Financial Goals
If your finances are in order and you have enough savings, then investing is certainly worth considering. Investing can help with many things from buying your first home to saving for your retirement. Whether you invest or not should depend on what you’re trying to achieve, how quickly you want to achieve it, and how much risk you can tolerate with regards to your investment.
Investing can you help you build your wealth and create a better life for yourself. It can also help your achieve your long-term personal and financial goals. That said, there are lots of things you need to consider before you start investing . For more information about our investing services, feel free to contact us.
Risk Warning: The information in this article is presented for general information and shall be treated as a marketing communication only. This analysis is not a recommendation to sell or buy any instrument. Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both an increase and a decrease in capital.