Invest

The 4th Step to money mastery is – Invest to increase your wealth!

Ok now that you’ve handled step 3 you’re ready to really move your financial position forward. This is WAAAAAY exciting and it’s your pay off for handling steps 1, 2 and 3 – because now you get to step 4 – ‘invest to increase your wealth’.

Think about this concept for a minute. Each dollar you earn is a ‘new servant’ in your household – ready to go out into the world and do great things for you – building your assets even bigger & stronger. It’s a great mental picture that can help you keep focused on your effective investment strategies. Your money – or your servants will protect you if bad times come along. And your servants will also help you grow your empire by discovering new pristine uninhabited lands.

Most people back in step 3 are spending all they make and effectively ‘eating’ their servants! If you eat all your servants how can they help you grow your empire or protect you from disaster

However, that’s not you! Now you know better…

Now you can put your servants to work and invest your left over money from step 3 so YOUR money is literally making YOU money.

Ok this is where research and confidence are important…

You’re going to need to start researching possible options and up-skill yourself in the area of investments. Now this is going to take some time and information-gathering so you’re clear on the best investment options that suit your goals and match your comfort level with relative risk.

In most cases the greater the return an investment offers, the greater the risk. There are a number of factors that you’ll need to balance personally to assess what’s called your ‘risk profile’.

If you’re interested to know what levels of risk are suitable for you and your situation you can click here.

Things like your age can make a difference to how much risk you want in your investments – because if you’re younger you have more time to recoup any losses from a negative investment. Whereas the closer you are to retirement the less time you have to recover and so the more prudent you’re likely to be.
This is a big area and there’s too much detail to cover in this blog, so what we’ll do is get you started on your very own, simple investment strategy.

This investment strategy is called your ‘Cash Reserve’.

I’ve found that many people manage to handle step 1, 2 and 3 – HOWEVER they’ve said they’ve come unstuck financially when they lost their job or their business went under or they were sideswiped by some other major bill.

So how do you protect yourself from unknown upcoming factors that may threaten your finances?

Fortunately, it’s very straight forward!

Firstly figure out the difference between what you make and what you earn and put it aside into the best account you can find at your local bank, By best account I mean one that that gives you the highest interest rate possible. Keep saving into that account until you’ve saved what I call a ‘cushion’ of 3 months’ worth of your regular monthly expenses. Now your servants are protecting you from any possible financial challenge in the future. In the meantime, you take the next 3 months to get another income stream up and running.

What this means, literally, is that once you’ve completed step 4 you’ll be better organised in your financial affairs than most people on the planet!