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Learning Center

How to Plan An Invesement?

Before making an investment plan ask yourself the right questions, and patiently work through the answers. Your investment plan is a detailed description of all the major components of your investment strategy. In order to structure a plan that is right, it is important to understand what you want to accomplish with the investments.

Make a Financial Plan

What are the things you want to save and invest for?

  • A home
  • A car
  • An education
  • A comfortable retirement
  • Your children
  • Medical or other emergencies
  • Periods of unemployment
  • Caring for parents

Make your own list and then think about which goals are the most important to you. List your most important goals first. Decide how many years you have to meet each specific goal, because when you save or invest you will need to find a savings or investment option that fits your time frame for meeting each goal.

Know Your Own Financial Situation

Take a look at your current financial situation. Make a list of “what you own” and “what you owe”. Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a “positive” net worth. If your liabilities are greater than your assets, you have a “negative” net worth. Follow a plan to get into a positive position.

Prepare a Budget and Know Your Expenses

Prepare a budget for your expenses. A budget helps you in identifying the spending areas and helps to regulate your cash flow. Tracking your own expenses against the budget helps you control spending and free up cash to clear existing debt and save for retirement or your child’s education.

Save for Emergencies

Emergencies often arrive unannounced. Ensure that some money is set aside to cover your monthly expenses for at least three months. These funds should be invested or set aside in instruments that can be readily accessed when you need cash.

Ground Rules for Investing

Before investing, you should first consider these factors that will determine when, where, and how to invest.

Best Use for Your Money

The most important factor to consider if it is the right time for you to invest is to look at the best use of your money. First, make sure that you have an adequate health insurance, to protect your money against the high cost of being treated for health problems.

Your Objective for Investing

Determine that where shall you invest your money. Whether you want to grow your money fast or you just want to preserve your capital in the safest way.

Your Age

Make an investment according to your age:

  • If you are young, you are more secure and will be able to wait a longer time to enjoy your investment benefits.
  • If you are middle aged, you should invest the maximum amount you can afford so you can live comfortably when you retire.You should also put your money in a relatively safe investment, so there is very little risk of losing much of it by the time you retire.