Simple Investment Plan For 2023

 

Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.

Making an investment plan requires more than just choosing a few stocks to put money in. You have to consider your financial situation and your goals for the future. It's also important to define timeliness and how much risk you're willing to take.

Planning before you earn your hard earned money is extremely important. This may require a lot of information and research or consulting with a financial advisor to help talk you through your unique financial situation.

 

Step #1: Examine Your Current Financial.  Situation.

 The first step for making an investment plan for the future is to define your present financial status. You need to figure out much you can invest, you can do this by making a budget  to evaluate monthly disposable income after expenses and savings. This will allow you to determine how much you can reasonably afford to invest.

Step #2: Define Financial Goals.

 This following step is to make an investment plan to define your financial goals. Why are you investing? What are you hoping to earn money for? This can be anything from buying a car in a few years to retiring comfortably many years down the road. 

You must also define your goal timeline, or time horizon. How quickly do you want to make money from your investments? Do you want to see quick growth, or are you interested in seeing investment growth over time?  

 

All of your goals can be summed up in three main categories: safety, income and growth. Safety is when you are looking to maintain your current level of wealth, income is when you want investments to provide active income to live off of and growth is when you want to build wealth over the long term.  

 

 Step #3: Determine How Much Risk You're Willing to Take.

The next step in crafting your investment plan is to decide  how much risk are willing to take. Generally speaking, the younger you are the more risk you can take, since your portfolio has time to recover from any losses. If you are older you should seek less risky investments and instead invest more money upfront to spur growth.

Additionally, riskier investments have the potential for significant returns but also major losses. Taking a chance on an undervalued stock or piece of land could prove fruitful, or you could lose your investment. If you are looking to build wealth over years, you may want to choose a safer investment path.

Step #4: Big Decision (What to Invest In?)

Your budget, goals and risk tolerance will help guide you towards the right types of investment for you.  Consider securities like stocks and mutual funds, long-term options like IRAs, bank savings accounts or CDs and 529 plans for education savings. You can even invest in real estate, art and other physical items.

Wherever you device to invest, make sure to  diversify your portfolio. You don’t want to put all of your money into stocks and risk losing everything if the stock market crashes, for example. It’s best to allocate your assets to a few different investment types that fit in with your goals and risk tolerance in order to maximize your growth and stability.

 

Step #5: Monitor Your Investments.

Once you have made your investment, it's not wise to just leave them alone. Every so often, you should check in to see how your investments are performing and decide if you need to rebalance.

For example, maybe you aren't putting enough money into your investments monthly and you aren't on track to reach your goals, or maybe you're depositing more than you need to and you're are ahead of schedule. Maybe you want to move your money to a more stable investment as you get closer to achieving your long-term goals, or maybe your investments are performing well and you want to take on even more risk to reach your goals sooner.