Investment and investment planning...Investment planning...The often quoted proverb -"fail to plan - plan to fail" is annoying but normally correct. More often than not a person with a long-term goal who works and works their plan will beat others in any pursuit in life who does not have a plan. Why - well everything they do is directed to a goal.
The Planners JobWithin DIY Retirement Planning it is the planners job to help you work out where you are, where you want to go and how to get there. Simple, no more no less. The outcome is the investment plan. Your JobIt is your job to make sure you have all the information ready for the planners and review all their work, in the plan, and help with all the input. Why should you not just have a generic plan?Because everybody is different and if you get an advisor who just says "Yes, we will just use number 4 for you," then you're probably talking to the wrong advisor. If you use a boilerplate approach to planning you will get what most people get. If you look at the stats that means you will end up like 96% of the population, dependant on the Government in retirement. The investment plan as a living documentThe plan should look at the things inside and outside of DIY Retirement Funds; your plan should cover both needs up dating and overhauling at different time. Here are some ideas but you may come up with your own:-
Why does your plan need to be looked at so often?Simple. If you set of on a journey of 100 miles and are 1% out at the beginning and go another 1% wrong every five miles you will not end up where you want to go. At the end of your journey you will have to adjust and make another journey to get there. At that stage though you may not have the means to get there. If, however, you adjusted all the way you will probably get to where you want to go in the most effective way. As your mum used to say, a stitch in time saves nine. What will your plan for your DIY Retirement Fund Contain?It will contain the info above, where you're are, where you want to go and then the now to get there. Risk ManagementThe now to get there will include a risk strategy. Risk is not just do you invest in low risk of high risk, but what you see as risk. For instance in an investment plan you may see buying and holding stock as low risk, a person educated in using options will see a buy and hold strategy as maximum risk. Again we are all different and so will your risk strategy be. DiversificationThis is where you may follow a strategy of one third in property, shares and cash, and within those, if you fund is big enough, 10 different shares in different industries, and 3 properties in different states. All this is meant to do is to save you from any one disaster. Again this diversification for one person may be high risk and for another low risk. Tax effectiveAre you going to use tax effective investment to offset tax, this normally means investments where you cannot access the money for five to ten years. InsuranceThis is one of the most important points of an investment plan, buy, hold and protect. The items above cover the buy and hold and the insurance covers the protect, whether that is life, trauma, loss of income, property, fire and using options on stocks to insure. The sub categories in an investment plan can go on and on but if you want more information go to investment and have a look how to set up a total DIY Retirement fund.
|
