editor Investing is one of the best things you can do to prepare for your retirement, and we understand that it can feel quite overwhelming to begin with, however just take it a step at a time and do your research and you’ll be well on your way to a well funded retirement. Whether you’re 20 and preparing for a lifetime of saving for your retirement, or you’re getting closer to retirement age, it’s never too late to start, your strategy might just need to be a bit different depending on how much money you need to save for retirement.
We’d recommend talking to a financial advisor if you’re later down the line to help make your investments as efficient as possible, however we’re here to summarise some of the best things to consider when you’re beginning to invest. So, let’s help you to understand the basics when it comes to investing for your retirement, to keep your money safe and to help you reach your goals.
Do’s
Research
Even if you’re working with a financial advisor, researching different investment opportunities is so important. Before you invest in anything, you need to fully understand the pros and cons of that market, how volatile the market is, where the risks lie, how consistent financial growth has been over the last decade and so on. Depending on how much money you need to make in what space of time will depend on the type of investment you make, however it’s key that you consider all of your options thoroughly, as well as getting a second opinion if you’re ever unsure.
Diversify Your Portfolio
First on our list of do’s is to diversify your investment portfolio. This is all about putting some money in different areas of investment, to reduce the risk associated as well as to give you different opportunities to grow your wealth. If you put everything into one thing, whether it’s keeping all your money in property and then there’s a crash, or the same with a specific technology stock or something similar, then you could lose everything quite quickly. So, having money in different investments is key to success, usually with the majority of your money in lower risk investments and then a smaller amount assigned to higher risk, higher reward investments.
Focus On Long Term Investments
You should also make sure you’re focusing on longer term investments for your retirement. When someone invests for a living, often quite a bit of their money goes into more volatile stocks as this is where the big money can be. However, we would never recommend risking your future on this, as any investment can unexpectedly U turn. Instead, you should focus on investments that will build over time to help you meet your financial goals.
Donts
Have Unrealistic Expectations
If you’re entering your retirement investment plan with a “get rich quick” mentality, then you’re unlikely to succeed. You’ll probably put your money into higher risk investments, and whilst this does pay off for some people, it doesn’t for the majority. Instead, focus on steady growth towards your retirement to reduce risk and strengthen your financial portfolio. It’s good to speak with a financial advisor to help manage unrealistic expectations and to help guide you on a path of steady growth.
Read: American Century Login: Streamlining Your Investment Experience
Overinvest
It’s also so important not to overinvest. When a market is doing well and there are reports that it’s very stable, it can be easy to throw money at it thinking you’re guaranteed a return. However, you literally never know what is going to happen. We know it was a long time ago, but the Wall Street Crash of 1929 is the perfect example of how everything can change within a split second. This is also why diversification is important, as even if one of your safer investments falls through, you won’t lose everything.
Fall For Scams
One of the most important things we can tell you is that it’s vital you never fall for a retirement scam. These are increasingly common and usually come in the form of a “broker” approaching you to say that they have a simple, low-risk solution to help you transform your retirement fund. Either they will take the time to grow your trust and then convince you to send them information that either means they can hack your accounts or encourage you to send them money for them to invest.
This may initially be a small chunk and then they show you a strong return, then before you know it, you’re involved in a broker scam and they encourage you to send more money that they then scam you out of. Make sure you read up on the different scams relevant to your investments and never give out details or send any money to people who approach you, as a genuine broker will never be the one to approach you.
