Having a goal and putting a personal finance plan into
place is a good idea. But with so many savings and investments
products to choose from, it’s sometimes tricky to know which one’s the
right one for you. That’s where an expert financial adviser can
really help.
For example, did you know there’s a
difference between saving money and investing it? Saving money means
putting it away in relative safety. Usually, you’ll get some interest
on top, and can access your money whenever you want it. But making an
investment means taking more risks with your cash, in the hope that
it’ll go up in value over a period of time faster than savings would.
It’s important to know from the outset that an investment’s value can
go down as well as up. You might not get back the money you put in
and, in most cases, if you’re investing your money, then you need to
think about tying it up for a minimum of five years.
When planning your savings and investments,
it’s important to consider what level of risk you would be happy with.
Low risk investments often mean that there is a low chance of you
losing your initial investment, but the return is often quite low.
High risk investments, as you may have guessed, are the opposite to
this. There is a higher risk of losing your money but the payoff is
the potential higher return. Your outlook on risk can be influenced by
factors such as your age (eg are you close to retirement?), your
financial goals, your financial commitments and how much money you
have. Your overall investment strategy could be made up of a number of
separate investments at different levels of risk, with the overall
outcome of spreading your risk whilst aiming for the growth or income
you require - effectively not putting all your eggs all in one
basket.
You may be thinking about starting a savings
or investment plan, or have a plan already in place. But just think
wouldn’t it be good to save more money and avoid paying unnecessary
tax? Or find out if the risks you’re taking with your investments have
changed? How about getting an income from your cash, as well as see
it grow in value? There’s a lot to think about. That’s why it’s a great
idea to get savings advice and investment advice from a financial
adviser.