4 questions every investor should ask themselves
Putting money away for retirement is a necessary part of getting older. It's a task that we perform from a young age throughout our working lives - and one of the most important goals we save for.
While some people leave it up to their compulsory super payments to accrue over the years, others take a more savvy approach and make a real estate investment or two.
But before parking your money anywhere, you'll need to ask yourself a few questions first:
What are my goals?
Goals are an integral part of any investment strategy. If you don't have any goals, how will you know if you've been successful? How will you measure if you're on track?
We all know retirement is a very expensive part of life. And if this is the priority goal you're investing for, put in the hard work to determine an exact figure.
The Association of Superannuation Funds of Australia says retired couples need over $57,000 per year for a comfortable lifestyle. But remember - this figure can rise depending on inflation. There's also taking your own retirement goals into consideration. Travel, living abroad or even starting up a part-time business can make retirement much more expensive.
By consulting a wealth coaching expert, you can identify what your goals are and come up with a strategy of how to get you there. Next, you can find a suitable investment.
What should I invest in?
Some people prefer stock, shares or even term deposits. However, these types of investments might not be suited to your specific goals. You may even be drawn to particular types of investments over others purely because you're familiar with them.
For instance, homeowners may choose to sway toward investing in real estate, as they already own a home and are familiar with the ins and outs of property. Some financially savvy people may even start up a self managed super fund and invest in a variety of assets.
Have I done my research?
Don't simply hand over your cash without doing your home work and expect things to go swimmingly. Real estate investment is a popular wealth creation avenue, but it's one that requires a decent amount of property mentoring and education.
Get to know the national real estate market, the way finance works, and how vacancy rates and values can affect your overall return. This will allow you to make an informed decision before spending any of your hard-earned money.
Can I afford it?
Finally, always examine your finances carefully before making any investments. If you don't have the finance, or if you've borrowed too much credit, think about ways to save and reduce your debt. For home owners who don't have a deposit saved, there's also the option of using your equity to help you get on the investment path.