Many individuals and families have both a need and a desire to accumulate wealth. The inevitable question is, “What do I invest the money in?”
The answer to the question usually depends on the needs, temperament, and available resources of each individual or family. The process of choosing the most appropriate investment can be made easier by carefully considering, and answering a lot of questions. The first step is to attend one of our regular coaching events. Second do an investor inventory with one of our coaches. They will go through the 20 must answer questions every investor should know. In addition to those questions you need to answer the following questions:
What are your investment goals? In other words, “What do I want the money to do for me?” For example, an investor might need to have additional income to meet current living expenses. Other common needs include saving for long-term goals such as retirement, a child’s education or a dream vacation, or for a quickly available source of emergency funds.
How liquid does the investment need to be? The term “liquidity” refers to how quickly an investment can be turned into cash, without losing any of the invested dollars. The question might also read, “When will the money be needed?” For example, investments meeting longer term goals, such as retirement, generally do not need to be as liquid as those designed to hold emergency funds.
Is the skill and knowledge needed to manage the investment available? An investor may not have the specialized skills and knowledge needed to properly select or manage an investment. In such instances, professional investment advice, or investments where such advice is available, should be pursued.
What is your risk tolerance? Can you afford to risk losing a portion, or even all, of your investment without it affecting how you live? What would be the impact of a loss on your investment goals?
If you or someone you know needs help planning for retirement, have life insurance or investment management needs, just give us a call.
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