Investing wisely and in line with your financial needs is an essential task for those who want to enjoy financial stability and prosperity at every stage of their wealth journey – essentially from the time you start earning and managing your own money and into your retirement.
While investing is something you should consider at every stage of your life, the decisions you make around investing are likely to change depending at what stage of life you are in and in relation to major life changes such as having children or entering retirement. The truth is major life decisions don’t just affect your personal journey – they affect your financial one as well, as your financial goals and dreams therefore need to shift in relation to those changes. For example, a single individual might have the spare capital to consider a high-risk investment in the hope of achieving high returns in a short amount of time while parents who are saving to meet the living and educational costs of a young family might need to follow a more conservative approach to investing, to reduce the likelihood of losses or less than favourable returns.
That’s why it’s essential to regularly evaluate and review your investment choices. And to make the necessary adjustments to ensure that your investments add the best possible value to your life, throughout your life. A reputable independent financial adviser can help you manage that process. Below, we’ve listed some of the major life stages that might require a re-think of your investment decisions in line with your risk tolerance. These are simple guidelines as some might never apply to your situation or needs but we hope they get you thinking about your own situation.
Investment management considerations in line with life stages
1. Starting your career
Start saving and establishing an emergency fund (and increase these as your salary increases).
Prepare yourself for investing beyond the basics (read more here).
Start planning for retirement – it’s never too early to start!
2. Getting married and buying a property
Decide on your new investment plan based on your combined income, expenses and long-term goals.
Increase savings and retirement planning.
Invest in property, considering the impact of short and long-term investment planning.
3. Planning and having children
Increase your savings and emergency funds.
Invest in life insurance.
Put in place or update your will and succession plan.
Plan for education funding.
4. Upshifting your career
Review your investment strategy and asset allocation in line with your new salary and any benefits.
5. Nearing retirement
Strengthen your retirement savings.
Make your financial security a top priority (even before the needs of your adult children).
Review your retirement income and decide if you need to reallocate investments to provide the income you need while still providing for some capital funds for growth in later years.
Investing well requires expertise, experience and discipline. We can help! As independent financial advisers, we are able to balance essential financial steps with your individual needs, offering your financial guidance and insurance and investment options tailored for each stage of your life journey.