Love is in the air and while gifts are going out to significant others and secret crushes, this Valentine ’s Day is the perfect time for you to start falling in love with your portfolio.
7 Ways to Love your Portfolio:
(1) Get Rid of Debts
Anything that is holding you back should be addressed at the forefront. The most common financial burden tends to be bad debts. Start with credit cards that are compiling the most interest while waiting to be paid. Budget to pay them off as quickly as possible and think about switching to a card that better suits your spending habits and payment schedule.
We all know the saying ‘don’t put all your eggs in one basket.’ This is particularly true when it comes to your portfolio. Whether its shares or property make sure that you participate in a few different areas/assets to ensure that you are not at risk if one of them goes astray.
(3) Take Control of your Superannuation
Self managing your super fund is a definite alternative for some but not for all. If you don’t have the means to self manage there are still ways to take better care of your super. Check to see that your account is one that benefits your needs and isn’t just eating away at your fund. One option is to make some contributions yourself on top of your employer. This will speed up growth and get you more involved in the account’s activity.
(4) Continually Asses and Adapt
Now that you have invested and you have a clear and organised portfolio, your job isn’t exactly finished. Don’t become ‘love struck’ by the success of your assets. The key to continued success is consistent assessment. In other words, sustained monitoring of how your investments are doing and what changes may need to be made. Stay up to date with the changing economic conditions, thus, putting yourself in a good position to remain ahead of the curve. Remember, investing is a complex process. Do not make decisions without proper guidance and if you need assistance, there is no one better than a financial planner.
(5) Don’t just Gaze at your Equity
Equity can be a very powerful tool on the path to wealth creation. However, that is only if you use it properly. While it is nice to finish paying off a mortgage, the true benefit comes when you leverage that equity into other investments; in other words, use one of your current assets to earn you more. Strategies may include purchasing an investment property with your current home’s equity or using that equity to purchase shares. Whatever route you choose, you may as well get that hard earned equity to start paying you back.
(6) Set up an Emergency- Only Fund
Once you have gotten rid of the bad credit card debts, it is important to have a reserve account to be able to combat any unforeseen issues. A proper emergency-only fund should have the resources to pay off 6-8 months worth of things like mortgage payments, car payments, food and utilities. Keep this tucked away for that rainy day and resist the urge to break into it for that expensive Valentine’s Day gift.
(7) Educate Yourself
As is the case in most areas of your life, the more you know about investing, your portfolio and the market, the better. Whether it is grabbing some books from the library or simply reading the business section in the morning paper, knowledge is power. New found information about where you money is going will definitely put your mind at ease and help you make the most informed decisions. Start by making it your goal to read one finance book a week for a month and see where it takes you.
Sit back and watch your money WORK FOR YOU! That’s certainly an idea we can all fall in love with!
Happy Valentine’s Day!