Managing your personal finances might not be the most alluring of undertakings, but it is one of the most important things you can do with respect to setting yourself up for later life. The recent cost-of-living crisis, which is still impacting families today, is if anything the perfect demonstration of economic volatility, and of how a steady pension may not be enough to weather the potential difficulties of future Britain.
Besides which, growing your wealth – if done shrewdly, and with enough initial investment – could become a vehicle for complete financial self-sufficiency. The route to healthy wealth is not a simple one, though. While some have loudly made their fortune with risky bets on the rapid movement of stocks and shares, many more have lost their fortune in just the same way. The true route to financial resilience is the slow and steady one – but how can you create a low-risk financial strategy that rewards you in the end?
Diversify Your Investments Across Asset Classes
The key to a robust portfolio is diversification. The old adage ‘don’t put all your eggs in one basket’ is especially pertinent to investment in stocks and shares; placing the entirety of your investable wealth on the fortunes of one company, however robust it may seem, is a recipe for disaster.
This is why the most common investment advice you will find is to place your money in a global tracker fund. These funds spread investments across the entirety of the market, effectively immunising you from the failures of individual businesses and even industries. If one stock fails, your portfolio is buoyed by the performance of the rest. As with any financial investment, you shouldn’t trust anonymous words online – and, if words like ‘global tracker fund’ mean little to you now, you may be better served entrusting your wealth to a management service that can work with such long-term interests in mind.
Consider Investing in Green Funds and Ethical Investments
With regard to specific investment tips, there are few ‘sure things’ that can guarantee high-yield returns over time, past careful investment across markets and a patient demeanour. However, shrewd reading of market movements can give you some key insights into future areas of better returns; climate change and the growing scarcity of fossil fuels make green energy an inevitability.
Focus on Long-Term Investments for Stability
It can be tempting, when investing, to reach for higher and higher yields. The attraction of 8% or even 10% returns is enough to engender some risky movements, let alone the thrill of placing money in the next Apple, Tesla or Nvidia. However, banking on huge returns like these is tantamount to gambling. Safer, long-term investments that you hold for years at a time enable you to elicit stable and constant growth – putting you in far better stead to generate reasonable returns later in life.
This returns, also, to green investments as expounded on earlier. As the world moves inevitably away from fossil fuels, solar and wind energy emerge as true long-term investments; with no immediate potential competitors for energy, these are destined to become steady generators of income as well as power.
