Good to Great: How to Scale With an Outsourced CFO

Are you aiming for financial security and comfortable retirement? The best thing you can do is to learn the basics of investing and set achievable, measurable financial goals.

 

That sounds easy enough, but the truth is, you probably have much more on your plate than planning for your future. Your to-do list is long, and financial planning keeps getting shuffled to the bottom because it seems less pressing than other items.

 

However, here’s the thing. Once you learn the basics of investing and set financial goals, you can go about your daily life knowing that your future is under control. You’ll be less stressed and more optimistic knowing time is on your side. Best of all, you’ll start reaching benchmarks and seeing the fruits of your labours.

 

In this post, we’ll look at ways you can start investing today so you can reach your goals in the future.

 

Start with Your Goals

Before you invest a dime, consider your motivation. What are you saving for? What do you hope to achieve through investing?

 

Maybe you want to spend your retirement years travelling or living in a new location. Perhaps you want to save for your children’s education. Whatever your goals, write them down. Next, figure out how much you’ll need to achieve your targets.

 

Consider setting short-term as well as long-term goals. Setting goals can be tricky, especially if you’re many years away from retiring or having to pay for your childrens’ university tuition. A wealth adviser can assist you with your calculations and make sure your assumptions sound reasonable.

 

Make sure your goals are specific, measurable and achievable. If you don’t include dates and amounts with your goals, you won’t be able to know that you’ve reached them.

 

Create a Plan

With your goals defined, you can create a plan to achieve them. To speed up your progress and stay ahead of inflation, you’ll need to invest your money. For most people, superannuation is the best place to start.

 

If you’ve worked for several different employers, you may have several super accounts. By combining your accounts into one, easy-to-manage fund, you can keep better tabs on your investments and reduce your fees.

 

Going forward, you may want to increase your contributions, which will speed up your financial progress and may reduce your tax burden. If you like to have more control over your investments, an SMSF may be a good option as well.

 

Understand Risk and Return

Before investing, you should evaluate the potential risks and returns. Some investments are inherently riskier than others, and you need to be comfortable with your risk level. Seek advice from a financial planner to determine the suitability of investments before you commit your money to them.

 

Most investors reduce their risk by diversifying their investments. Spreading your money across various asset classes can safeguard your money as different sectors experience downturns. For example, you may keep some funds in cash while others are invested in property, shares and fixed interest investments. If one investment struggles, you’ll still have other investments to fall back on.

 

Evaluate Regularly

Once you’ve started investing, whether it’s through your super, an investment property or other assets, it’s essential to monitor it. An annual review of your investments will help you to know if you’re still on track to reach your financial goals or if you need to make adjustments.

 

For instance, a life change such as the birth of a child can substantially alter your long-term plans. You may decide that you need to save more, and in so doing, you may need to change your budget so you can send more money to your super. Upon review, you may also determine that some of your investments have been performing better than others, leading you to alter your allocation.

 

A little attention to your financial goals now will lead to much better results in the future. To talk about investing with one of our wealth advisers, get in touch with us at Altus Financial.