How Can I Afford to Invest? We Share Expert Tips

Investing wisely is key to growing your wealth

When it comes to money and our financial situations, it’s easy to fall into the trap of only considering our personal money ventures. This tends to be monthly bills, rent or mortgages, and putting aside a little money for savings.

There is nothing wrong with this, but it only touches on the bare minimum of finances. There is an entire world out there surrounding investments and wealth management, which many people feel are far beyond their scope.

However, this doesn’t have to be the case. Regardless of your age or income, your money is important and financial freedom is key. It is beneficial to know where your money is going and what you want to save for.

It might be that, as well as investing money into various types of savings, you have the capacity to invest in yourself, too. For example, you may be able to change your career or lifestyle so you can live a more comfortable life in the long run.

Read on for some advice around investing:

Begin with a realistic assessment

Look carefully at your finances as a first important step. Work out how much money you need to comfortably live each month, and what you are left with when your bills and outgoings leave your account. Analyze what you can save, and if you are currently saving enough.

At any given point, you should have a savings account that gives you three to six months worth of outgoings, should an emergency happen. Do you have credit cards? Look at clearing these first. The interest rates can be costly, so it’s best to clear these as a priority.

Ask yourself if you are where you need to be

By starting with a realistic assessment, you get to see where you are in your life and what changes need to be made. Many people who want to increase their finances or be able to consider investing in stocks and shares want to run a successful business themselves one day, which they can put any extra money into as an investment.

You can look at working on starting a business or growing your existing one at any age, but it’s usually when it comes to analyzing whether you can invest that this comes to light.

Don’t be afraid to see investment, in addition to savings, as something you do for yourself. For example, it could be the right time to study for higher education courses or an MBA, which gives you all the skills needed to successfully thrive in the business world.

With an MBA, you pay for the course which puts you in a suitable position to enable your growth as a complete business professional, once you have graduated. With a qualification like this behind you, you can expect to climb high in the world of business, bringing in a higher income for you as you develop. Take a look at the MBA at Suffolk Online for more information.

It’s certainly worth getting all the right training and education done now, so you can play with more financial freedom for your future.

Choose where to invest

The next part is to choose what to invest your money into. The key is to be able to afford to part with your money for a long period of time — with investments, the longer you part with your money, the higher the return.

One aspect to investigate is upping your contribution to your pension. This is a long-term investment which is particularly key if you are freelance and don’t have a company that matches your contribution.

Alternatively, why not look into opening a stocks and shares ISA? If you choose the right stocks and shares (which can be tricky), you could be seeing positive investment. However, it’s important to bear in mind that investments come with the chance of risks, and you could get back less than you initially invested.

Another way to go about investing is to make overpayments on your mortgage. If you have an extra few hundred pounds after a bonus at work, it’s smart to put this towards your mortgage. Everyone dreams of being mortgage free, but even the benefit of having a low mortgage will put you in good stead for the future when it comes to selling your house.

If you’re considering investing, remember that one of the golden rules is to be diversified. If you can, spread your money between different stocks, shares, savings, your pension, and mortgages so that you can see which one is working the best for you. This will also reduce any risk factor.

It’s a personal topic, as everyone’s financial situation is different, so don’t be afraid to seek professional advice to help guide you down the path that is suited to you.