Investing In Your Financial Future With Fintech: Where Are You Today?

Author Aventur • 11th June 21

So, you’re thinking of investing? That’s great!

At Aventur, we believe that investing should be simple, stress free, and accessible to everyone. We’re here to debunk the myths and guide you in making financial decisions that support your goals. Today’s blog is dedicated to helping you determine what kind of investing is right for you, whatever stage of your financial journey you’re at.

First of all, you need to understand where you are right now. Depending on your age, financial position, and financial goals, you should fit broadly into one of the following categories. Find your category using the definitions below, and then scroll down to discover the advice that suits you best.

Category 1: The Early Investor

  • You are aged 18-29
  • You do not own your own home
  • You would like to invest to build the funds to invest in your own home, travel plans, and/or the future

Category 2: The Long-Term Investor

  • You are aged 30-55
  • You own your own home
  • You would like to invest for the future and/or your retirement

Category 3: The Retirement Investor

  • You are aged 56+
  • You own your own home
  • You would like to invest to enhance your retirement and/or for your children/grandchildren

Now you know your category, it’s time for that advice we promised

Not sure which category you fit into? Not to worry, you can contact us here for advice that is tailored to you.

Category 1: The Early Investor

It’s time to start planning for the future, and investment can be an excellent way to do that.

The best thing to do when it comes to investing, is to start early. The earlier you start, the more you can earn in interest, even if you only have a small amount of money to invest. This is because of a phenomenon that that clever chap Einstein called the 8th wonder of the world: ‘Compound interest’. This is the type of interest you accrue when the interest you earn on your savings or investments begins to compound on itself.

Now you’re investing, it’s time to consider your goals. What do you want to gain from your investments? Split these into short and long-term goals and then arrange investments that fit both buckets.

For short-term goals, like saving for a house, you are better off opting for a low-risk investment such as a Certificate of Deposit or Savings Account.

For long-term goals like retirement, you can afford to invest more aggressively, as the length of time you’ll be investing will allow for the standard rise and fall of the stock market.

Budget according to your investment amount, so you can learn to live on the remaining income you have after investing. Ensure you have enough for necessities and any additional expenses, so you are not tempted to dip into your savings or create debt, and be strict with yourself. After all, you are investing for yourself. If you need to, start small, with just 1% of your wages, and then build up gradually to a more significant amount. This way, it won’t feel like a big change in the amount of money you have to spend on investing each month.

Finally, ensure your investments are set up automatically. Talk to your employer about their pension options and pick one that fits within your budget whilst making the most of your employer's contribution. If this is not an option, set up a direct debit or standing order to ensure your investments go out automatically each month (before you spend it elsewhere!). You might also consider setting up a private pension to top up the funds available to you later on in life.

Category 2: The Long-Term Investor

You want to invest for the future, but you’re kicking yourself that you didn’t start way back in your 20’s (before you had a house, a partner, children, pets, and other commitments to worry about). If that sounds like you, you’re not alone. But don’t worry, it is never too late to start investing, you just need to make sure you’re making the right decisions for your current financial position.

First of all, set your goals. What do you want to get out of your investment? But not only this, what do you want to get out of your money in the meantime, as your investments grow? It is important to ensure you’re not focusing so much on the future that you neglect the here and now. Perhaps you want to save for a comfortable retirement, but you also want to ensure you can pay your mortgage, be prepared for any emergencies, enjoy your life, and look after your children/pets/friends/family. You might even have a big event, such as a wedding or holiday, coming up that you need to save for, too.

Now that you’ve got your goals together, it’s time to organise your money accordingly.

Start by budgeting for the monthly costs of your day-to-day life - this means mortgage or rent payments, bills and necessities, leisure, gifts, and anything else you purchase regularly.

Then, with the money left over in your monthly income, split it into short and long-term investments. Unless you already have one saved, our short-term savings should be put straight towards an easily accessible emergency fund. This fund should only be dipped into in an emergency (for example, if you lose your job or your car is written off).

Now you can start saving for your future. The simplest way to do this is to sign up to Aventur, where you will be guided through your options to find the right investment plan for you. We can arrange for your money to be taken automatically on a date of your choice ,so you won’t even know it’s missing!

Finally, with any money left over, you can look at saving for those exciting events. We know it might seem unfair to be leaving these until last, but your priority simply has to be your future. After all, your budget for that big holiday you wanted to go on can be flexible, but your future can’t.

Category 3: The Retirement Investor

Are you looking to make retirement that bit sweeter, or perhaps put some money aside to pass on to your children and/or grandchildren?

The good news is, it is not too late to start investing. Investments can be a great way to secure yourself an additional steady income or a lump sum whenever you want it. If you’re still working, that’s great, as you can factor savings and investments into your monthly spending. If you are retired, you still have plenty of options. Recently announced ‘pension freedoms’ allow anyone over 55 to take control of their retirement savings and manage them how they wish. This gives you the freedom to invest your retirement fund, so you can make more from the money you’ve already saved.

Your options for investment are fairly simple: invest through your pension plan or use a SIPP (self-invested personal pension). A SIPP gives you much greater autonomy over your investments, but it is only suitable for people who are comfortable making their own investment decisions.

Investing through your pension plan doesn’t mean losing control of your investments altogether. Most defined contribution pension plans offer a range of investment funds that are designed to invest your money in different ways over the years, until you choose to start taking the money for yourself. However, you are fairly bound by the type of pension plan you chose to take out in your earlier years. If you need help finding out what kind of pension plan you are currently saving through and what this means for your investment options, the experts at Aventur can help. Just get in touch.

If you are using a SIPP, intend to switch to one, or are looking to use ‘pension freedoms’ to start investing your savings, you have a few key options. The best, and most popular choice, is to diversify your investments. This means investing in a mixture of low and high-risk areas to keep some of your money safe whilst still maximising the potential of gaining from those high-risk-high-return options. Here are just a few popular low and high-risk investment options:

Low-risk options

  • Gilts - bonds issued by the government
  • Certificates of deposit (CDs) - a savings account that holds a fixed amount of money for a fixed period whilst building interest
  • Money market funds - pools of CDs, short-term bonds, and other low-risk investments grouped together to diversify risk
  • Stocks, preferred stocks, and corporate bonds - types of shares in large companies that pay cash dividends (note: these can vary in risk)
  • Fixed annuities - a contract that pays out a level of income over a set period in exchange for an upfront payment

High-risk options

  • Venture Capital - investments in startups and new companies to help them get off the ground, in return for a share of the profits
  • Initial Public Offerings - investments in a private company that has recently become public by selling its shares on a stock exchange
  • Foreign Emerging Markets - investments in markets abroad to help build and support their economies (i.e. India)
  • Real Estate Investment Trusts - investments that are placed with a company that owns, operates, or finances income-generating real estate

Whatever type of investor you are, taking control of your money is the key to success. That’s why Aventur puts you front and centre when it comes to planning your investments. Contact us today to get started.

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