How to sustainably grow your wealth!

To build and sustain wealth, individuals should:

FOCUS ON TIME IN THE MARKET RATHER THAN TIMING THE MARKET

It is important to continue investing through all market conditions, and particularly during market lows when share prices are undervalued and a lot cheaper, so that you gain more during market highs.

UNDERSTAND TIME HORIZONS AND RISK

Time horizons are a major influence on an investment approach. The longer your perspective and the longer you are prepared to invest, the more options you will have with greater returns without increasing your investment risk.

DIVERSIFY PORTFOLIOS

When deciding where to invest, it is always better to cast your net widely. Do not have all your eggs in one basket. Also do not focus on the returns from the individual components of a diversified investment portfolio. Rather look at the performance of your portfolio as a whole.

KEEP INVESTING OVER THE LONG TERM

Compounding returns are the most powerful force in investments. This happens when you get growth on your growth. This only occurs when you have been invested for a long period of time. Trying to make up for lost time will require a lot more allocated to your savings and can be dangerous if you chase unrealistic returns.

ENSURE INVESTMENT STRATEGIES ARE CUSTOMISED FOR SPECIFIC NEEDS

Each person is unique and their financial needs will depend on where they are and their personal future plans. A good investment strategy should take this into account. What might be good for one person is not necessarily good for the next.
There is a lack of understanding about the difference between income and wealth, and that most high earners have no idea how much they should be saving in order to sustain their lifestyles into the future.
In order to increase wealth, it is essential to be realistic about future returns. Not only do you need to start investing at an earlier age but you need to keep in mind that your investments need to continue to grow beyond retirement. The purchasing power of your wealth needs to remain intact and at the very least be able to match but preferably to beat inflation. Many wealthy individuals did not draw a distinction between business, lifestyle, investment and surplus assets. Understanding the characteristics of each of these asset types is critical to ensuring your financial security.

Business assets could be shares in a company which generate income and for non-shareholders, the income they derive from work. Investment assets are the assets required to replace the cash flow generated by business assets, especially on retirement. It is essential to grow these continually over time. Lifestyle assets include a primary residence, holiday homes, cars and other items bought to enhance lifestyles. Often debt is incurred to acquire more of these kinds of assets, which further erodes the funds left for investing.

Surplus assets relate to the amount of money not required to fund lifestyle needs. These funds can be risked to increase investment assets, to invest for future generations or to give back through charities or philanthropic foundations. Getting the balance right with the spread of these asset types will ensure the success or failure of an investment strategy.

Talk to Alasdair about what kind of plan you need at this stage in your life or what you wish to achieve for the future when retirement looms. Can you afford to leave your investment strategy to chance? Please complete the attached enquiry form or contact Alasdair directly on 01-8101912 or via info@agsfinancial.ie.