Four steps to financial security

Throughout our lifetime, we all seek to achieve some form of financial security.  The best way of achieving this is to set down a financial plan and the earlier you start the better the chance of achieving your personal goals.  Here are four basic steps to any financial plan.

1. SET YOUR GOALS AND DECIDE YOUR RISK LEVELS

Ensure that you set short and long-term goals and that these are realistic, achievable and affordable.
For your short-term goals, you will need to have cash readily available as well as having some for emergencies. We like to call it a Lifeboat Fund and this could be an easy access account.  A good place to invest for long-term goals is in unit trusts, as cash savings often fail to keep up with the rate of inflation. If your bank deposit is only giving you say 1.5% pa and current inflation is 2.6% pa then your savings are wasting away.  As investing carries risks you will need to decide how much risk you are willing to take. Here at Anglo we help you to determine what level of risk you are willing to accept, and help you to build investment plans and portfolios to suit your personal risk profile.

 

2. THE LITTLE AND OFTEN STRATEGY

The earlier you start setting your investment goals the better; by investing regular amounts over time will help to build up a nice sum for your future. For example, by investing £100 per month could generate £35,000 in 20 years assuming 5% annual growth rate. An ideal plan for this is monthly savings into an investment ISA. It is best to set up a direct debit so you do not forget to make a payment and are not tempted to skip a month.
If you are unsure, as to whether you can afford to save a set amount you can use our online Income Expenditure planner on our website.

 

3. DON’T FORGET YOUR RETIREMENT

Again, by having a plan in place early can make all the difference when it comes to your retirement. Under current rules everyone, yes everyone, can contribute at least £3,600 gross into a pension each tax year.   Don’t forget The Government contributes an extra 25% of your contribution.  If you are working then you can contribute a higher amount into your pension.  The best option is a work-place pension as your employer also contributes into your pension scheme as well as you. To build a bigger pension fund, you can still have a personal pension to run alongside your workplace pension.   If you are self-employed then you can take out a personal pension which can be made very flexible to suit your business development.  In basic terms the more you contribute towards a pension and the better the investment performance the bigger your pension fund in retirement.

 

4. CONSIDER A LITTLE EXTRA HELP 

The final step is once you have decided that you want to secure your financial future is to decide if you want professional advice.  This would benefit you greatly particularly in helping you to arrange the set-up of the plans and guidance on the choice of investments.  One of the main benefits is that you have someone looking after your investments and getting the best performance.  Remember the value of investments can fall as well as grow so it is best to get good investment advice from the start.

If you would like independent financial advice on setting up an investment, savings plan or a pension, then please contact us on our Freefone number 080 19301066 or click on the Investment enquiry button.