What Should You Consider When Creating an Investment Plan?

KLOFinancial |

For example, if you wanted to retire in your early fifties, or have the option to semi-retire, you’d need to think about the finances you’d need to support this lifestyle choice. To do this you’d need to look at investments and your pension contributions.

Creating an investment plan doesn’t have to be a laborious task, to prove it we’ve put together some helpful and insightful tips.

What do you want from your investments?

Considering exactly what it is you’re investing for and what you want as a result is a good place to start. Having this clear objective in place will make the process of putting together an investment plan much easier.

Your objective needs to go beyond just growing your wealth. For example, if you wanted to pay-off your mortgage early, give yourself a target date.

How much risk are you willing to take?

Risk is an important factor that will need to be carefully considered along with the timescale you have. The more time you have, the less risk you could take. Likewise, if your investment deadline is on the horizon the more risk you might take.

There are investments that could help you reach your goal without taking on unnecessary risk, but it’s vital to think about the timescale you’ve got to achieve your investment goals. This will reflect the level of risk you can take.

How much can you invest?

You’ll need to work out this figure in order to be able to set up your investment plan properly. This section of the plan will mean looking at your household finances and budget.

A good place to start with this is to look at your bank statement, outgoings and income. It’s also a good idea to take a look at regular expenses such as council tax and insurance in order to get an idea how much you will be able to invest.

The next stage is to look at what you spend on essentials like shopping, for example. The average amount of what you spend on leisure and activities will also need to be considered as well, including money that needs to be saved for other expenses like holidays and trips.

Once you know what you spend, you can compare this to your income and work out how much you are able to invest.

What’s your strategy?

At this stage, it’s easy to get overwhelmed. This can stop you in your tracks with where to go next. This part of the plan is about working how much you can invest and whether that will get where you want to be.

You’ll need to consider whether you will be investing a lump sum or regularly investing, or a mixture of both. Think about how often your regular investments will be, and how you want to automate this process. At this stage, it is also a good idea research the different types of investments, so you understand what is available for you.

If you’re looking for financial advice regarding investment planning, talk to our financial advice team. Please call on 01926 492406 or email us at to make an appointment.