About Investing

Planning your Investments
As part of your investment goal you need to determine the rate of return you want to achieve and how much risk you can afford to take.

Here is a suggested checklist:

" The more you save, the more wealth you create..."

  • Work out your current financial resources to determine how much you have to invest.
  • Calculate your future financial resources and determine whether you will have an excess of income over expenses, which can be invested.
  • Be clear on your financial goals, which will determine how much money you will have and when you will need it.
  • Clarify the rate of return you need to achieve.
  • Be happy about the amount of risk you can tolerate.
  • Work out how you will allocate your investments amongst the various options available.
  • Make a selection of the securities you want to buy.

Investment Statements
An investment statement is a document that will give you information about the various investment products you are looking at. You need to look at this statement before investing any of your money.

The investment statement should contain answers to various questions such as:

  • What type of investment is it?
  • Which company or group is behind the investment.
  • What are the fees?
  • What is the minimum investment required?
  • What returns are expected?
  • Clarification of the risks involved.
  • Whether investments can be changed and the cost.
  • The possibility of cashing in the investment any time.
  • Who to contact if there are any problems with the investment.
  • Any other information that should be disclosed about the investment.

Pay Yourself First
You can only become a successful investor if you make investing a part of your daily life. This means you have to think about every decision that will affect your finances, whether going out for a restaurant meal or paying off your credit card debt. It means you have to keep the balance with your normal life alongside your investment objectives.

Don’t get obsessed about it, but it is good to keep in mind an investment-type attitude at all times. If you pay yourself first you may not have to get too obsessed. This simply means that when you pay your bills, such as power, water, phone, credit cards, etc, you add one more item to that list - a payment for you. Once you do this you won't have to think about it again until the next month.

You should try and put away as much as possible, with a goal of saving at least 10% of your annual income and if your obligations allow it, save more. The more you save, the more wealth you will create, but remember, saving something (no matter how small) is better than nothing.

If you can, have an amount automatically deducted from your account into a separate savings account, which is your investment vehicle. You will be surprised at how this amount will mount up over a short period of time, without you noticing.

It is probably a good idea to give this some serious thought. Pay yourself first.