Happy investor. Image: pacificcommunities.com
In a wide range books on tips to achieve financial freedom, and prevents you from financial problems, then there will be an explanation that the investment is a process of setting aside funds in order make a profit in the future.
Do you already have a financial plan and choose the type of investment?
If you want to realize your financial goals over five years, for example prepare retirement funds, an investment (rather than a regular savings account) is the right choice. To determine the pension fund you need to prepare then you can use a few simple tips, as mentioned below:
1. Define the purpose of your investment
Find out the reason you invest, whether expected increase in value of investment or passive income is routine. The purpose of these investments will affect the investment products you want to select.
As an example, if you choose the investments in property, then the property should be leased so that you will get regular income from these investments. If you want to profit from the capital, means that you are buying the property must be sold back to the higher selling prices in order to gain an advantage, but you must choose the right time to get high selling prices and profitable.
2. Identify the risk profile of investment:
Investment risk profile is distinguished in the category of moderate, conservative and aggressive. This category is very important so that you know you know the results and risks will occur.
|Property investment in Bali. Image: tripwow.tripadvisor.com|
The risk profile is an indicator of your tolerance for risk of loss of funds invested. If you want a safe investment because the product did not dare to take the risk of loss, it is classified as a conservative investment.
When you choose fairly risky investments in order to get higher returns, the investment is classified as moderate. Meanwhile, if you dare to bear high risk in order to obtain high profits, the investment is classified as aggressive.
For the category of conservative, proper investment products are fixed-income funds or government securities safe sort of retail bonds. As for moderate investment is when you choose the property and gold. For aggressive investment category is when you invest in mutual funds.
3. Consider the age and investment period
The risk profile can be determined by the age of the perpetrator or the investor and investment period. The younger the age, so is generally the more aggressive in investing. If you are over 40 years old you have to be careful in choosing the category or risk profile so that you can be more calm and comfortable, and not easily surprised if your investment suddenly are falling due to global economic shocks and global financial turbulence.
4. Avoid investing in one basket
Remember the following advice: do not put the whole eggs you have in one basket. For if the basket falls, all your eggs will be broken, so it is the principle when you invest. When you put your money in some investment instruments, then you still have a backup if there is one instrument that suffered losses. You will do this if you have sufficient funds, so you have a lot of investment options. If you do not have a lot of money, then you should choose a moderate risk profile.
5. Be careful to offer the promise of high yield investment
You've heard that there are people or even companies that offer a very high return on investment. Do not be easily tempted with a return that is too high, because there may be a ponzi scheme. You need to think more deeply and immediately you discuss with people whom you can trust, even companies that have aged decades can cheat to their customers. Remember, Barack Obama had a headache in the early days of his administration having to clean up crime and fraud in finance and investment. Make sure you know the risk profile of any investment opportunity that you do not get stuck and make you regret in the future.
When choosing the right type of investment, you can discuss with an expert financial planner. You can visit the office of financial services companies such as securities firms; contact your insurance agent or your friends who are already experienced on the right investment.
Now you can also purchase an insurance policy known as unit-linked, which is a combination of life insurance with an investment program, you can add, even with health insurance. Ask your insurance agent, and explain your needs to the agent, so that your insurance agent can create a proposal that is right for yourself, or for your other family members. The combination of investment and health insurance will make you more comfortable, especially for those of you who do not have a high income, so you should be safe from the high risk in the future.