Are your investment strategies right

You have been very careful about money and a vivid reader. You have managed your funds right and have been following certain strategies. But then you see everyone around you flouting their wealth and you are still saving and able to reach your dreams. What is wrong? The problem is planning. In our effort to save pennies we are losing pounds, which could have grown our wealth. You might be saying that the others are lucky, then why don’t you try and get lucky yourself. I’m not asking you to gamble nor have the others got their wealth gambling.

There could be many reasons why your savings have not been growing, you might be investing in shares based on tips and those tips are not going right. As I said earlier, everyone will give tips, but the same persons investing based on those tips. Also they set a stop loss, do you do it or just wait. You should be ready to bear losses as well.

Of course there are some safe investments like Fixed deposits, where you would get a return of 10%, but then this is taxable, if you are in the highest tax bracket, your post tax return would just be 6.1% which is less than the inflation rate. So though you have increased your money you have lost to inflation. Therefore it is always recommended to invest in such a way that you beat inflation and then only you can be wealthy, like those around you. Those people have not been lucky, but have been investing wisely.

Insurance is good, it secures the future of your loved ones in case you are no more. But do not treat it as an investment to make you wealthy, but an investment to take care of a risk of death. Real Estate is good, it has been growing, but for how long? Have you considered the tax implications?

Asset allocation is the most important method of increasing your wealth. Just equities will not help, unless it is for the long run. Just don’t hope for the market to just keep going up for ever. Follow a plan, based on your financial goals and you will be wealthy.

Are loans bringing your wealth down? Have you made best use of the cheap loans available? Is there a better option available? Are you using your credit card for loan purposes?

You need to reassess and check where you stand financially and get a good financial advisor. Now every person who sells mutual funds or insurance calls himself an advisor, don’t get carried away. Check the advisors credentials and check if he spends time to understand your goals, before suggesting you a solution.

Usually financial advisors will spend at least an hour with you to first understand your goals and assess the type of investor you are. He will then assess your existing investments and only then will come up with a strategy based on your goals and risk appetite. Take help and get wealthier faster, with the right investment strategies.