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Don’t follow the crowd

 

Written by R. A. Stewart

Prior to the 1987 sharemarket crash, which was named “Black Monday,” investors were rushing to buy shares and as the price rose and the value of their portfolio increased, people borrowed money to purchase shares using the value of their holdings as capital. When Black Monday arrived, the value of their portfolio dived, the result being that investors who borrowed money found themselves in the position of owing more money than their shares are worth.

The problem with using borrowed money is that the crunch comes when you have to pay it all back plus interest.

Jumping on a bandwagon can be very costly. In the case of the 1987 sharemarket crash, the price of shares did not reflect their true value but rather the amount of money which went into the market.

It reminds me of the old saying, “Something is only worth what others are prepared to pay for it.”

We have seen similar examples of companies on the share market which have seen their price rise then come crashing down quickly. Many who jumped on the bandwagon got their fingers burnt.

If you are going to try your luck at making a killing, then this needs to be done with your discretionary spending money and not with your retirement funds or your deposit for a house fund.

The reason being that investing for a killing is a short term speculative investment.

Once in a while you will hear stories of someone who made a killing by investing in such and such but you never hear about those who tried the same thing and lost. It is likely that such people ended up losing their profits.

Here is another saying worth keeping in mind, “Whenever there is an opportunity for a capital gain there is an opportunity for a capital loss,” that is the nature of the markets.

But with the right investing strategy you can achieve your goals whatever the markets are doing. If you have invested according to your risk profile then the state of Wall Street should not be a concern to you.

A windfall is only as good as how it is being used. It is not much good if it is being frittered away. Use it to your best advantage according to YOUR OWN GOALS and not what others think you should do with your life.

Following the crowd can destroy one’s chances of financial prosperity; Just take a look at how much money smokers are paying for their addiction. And where did it all start?

As a teenager when someone was offered a cigarette by their peers and because they were people-pleasers they accepted.

It is rather mind-boggling the amount of money smokers are burning through per annum. That money could have been put to better use. Not to mention the health aspect of smoking.

Set goals that align with your values and not ones which others have tried to impose on you. If someone has limitations then they will impose their limitations on you. Take heed of wise advice but use your common sense to discern whether the advice is good or bad. If you are unsure then ask a number of adults for their opinion. Don’t be afraid to ask and never be so puffed up with pride that you never take advice from anyone. “Pride always comes before a fall.”

About this article

The content of this article is the writer’;s own opinion and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your blog/website, or ebook.

Read my other articles on www.robertastewart.com

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Investing with a Vision

Investing with a Vision

Written by R. A. Stewart

“He who lacks vision will perish.”-Proverbs 29:18

Financial planning requires vision. What does vision mean? It is the art of preparing for the unseen. People will go through life stages. They buy a car, get married, have kids, and retire. A person with vision will make provisions for these life stages. A person with no vision will spend all of their discretionary spending money without giving any thought to the future.

This is irresponsible and selfish because there are consequences to spending now and burying your head in the sand mentality and that is often poverty. 

If you enter into a relationship with someone then you will take your financial situation into that relationship. If you have a bad credit rating then you and your partner may have difficulty obtaining a mortgage.

Someone who is a good money manager will make provisions for the future which will help them to withstand financial shocks which may not have been predicted such as a job lay off or health issues.

Financial planning does not end with saving money, but rather it is the beginning. Investing that money so that it is working for you can increase your savings and certainly your financial literacy. Your risk profile is the factor which determines where you should invest your money.

Your risk profile is the amount of risk you can take on in relation to the term of the investment. 

If you are in your twenties or thirties then investing in growth funds may be right for you because you have more time to recover from a market meltdown. Someone in their sixties may need their retirement funds within five years or less and the last thing you need is for the markets to take a dive just when you need the money.

If you are putting money aside for a mortgage deposit, car, your child’s education, then you may want to take a more balanced approach with your investing.

It is worth pointing out that you could fit into more than one risk profile category.

If you are young then financial advisors suggest that investing in growth funds is the way to go for your retirement fund because you may have more than forty years before you retire.

However, you may also be putting away money for a mortgage deposit and need that money within 5-10 years so taking a more conservative approach to your house deposit funds may be best. Again, if the markets took a dive just when you needed the money then your house deposit funds will be short of where you intended it to be.

Having the right kind of attitude to your money will pay dividends in the long term. Some people scoff at those who are prudent with their money, calling them selfish and money hunger yet go out and purchase lottery tickets in the hope of winning a quick million. If that is not a contradiction in their philosophy then I don’t know what is. Gold Diggers are notorious for this. A man is their only financial plan; they have no interest in gaining any kind of financial knowledge. There is an abundance of it out there. You just need to pay a visit to your local library to find such books. Even your local charity stores will have some of these books in stock. 

My favourite authors are Frances Cook, Mary Holm, and Martin Hawes. These financial advisors are from New Zealand. Their advice is just as applicable to other countries, well, most of it. It is just a matter of acting on what they say. That is, if it is applicable to your personal circumstances. 

Having some kind of vision for your life will make it meaningful and fulfilling and that requires a degree of vision. Just Go For It and take no notice of your detractors.

About this article

This article is of the opinion of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your ebook, website, or blog.

Read my other articles on www.robertastewart.com

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Who do you take Money advice from?

Who do you take Money advice from?

Written by R. A. Stewart

Everyone has some form of advice on what you should do with your money. From co-workers and family members to bloggers and those who are qualified to provide financial advice. A lot of people will have some form of opinion on what you should do with your money. So much so that it pays to not speak about your financial affairs with anyone; not that it is any of their business.

There are some red flags to note from any of these so-called financial experts. These red flags are just as applicable to the man in the street as they are to a qualified financial advisor.

Red Flag number one: The advisor has no money

I knew someone who turned a couple of hundred dollars into $6,000, then $10,000, then $20,000, and more. In the early stages when he had $6,000, his colleagues suggested to him that he should get a deposit for a new car with that money. I said “That is the stupidest advice you could ever get because not only will you end up with nothing but you will have a debt.” 

He ignored his colleague’s advice.

I told him that he should at least deposit at least $1040 in his Kiwisaver in order to get the $520 government money in July. I don’t know if he followed that advice.

Red Flag number two: They do not know anything your your personal circumstances

If you receive financial advice from someone who does not know a thing about your financial situation then treat that advice with some kind of scepticism. The advice and acting on it must be based on your personal circumstances and your goals for the future. Your age and health are other factors which have to be taken into account. It is your responsibility to make it known to a financial advisor what your future plans are but that does not mean that you should just reveal all to a random cold caller. Use your discretion and common sense when discussing anything with others. 

Red Flag number three: They advise you to invest your life savings in one company

This is a major red flag! Diversification spreads your risk but plunging all of your money in the one company can lead to financial ruin and affect your lifestyle big time. It may be true that there are some people who made a killing by plunging but it is equally true that a lot of people lost everything they invested. The only reason why a paid financial advisor would tell you to invest all of your money in the one company is that they are more interested in their commission rather than your financial well-being.

Red Flag number four: You are advised to invest in cryptocurrency

This is a major red flag. No one should ever advise you to invest in any kind of cryptocurrency. This is a high risk speculation rather than an investment. Only discretionary spending money should be used for purchasing Bitcoin. If you are young and have no commitments then buying Bitcoin will provide you with a bit of excitement, but it is certainly no substitute for your retirement fund.

Red Flag number five: The advice is unsolicited

If you receive a cold call from someone claiming to be a financial advisor then hang up or delete the email. Tell them that you already have an advisor. Whatever you do, don’t engage with them. If you have responded to anything they have said, then say, “Let me talk to my financial advisor first.”

A typical scammer does not want you to talk to anyone else about their so-called opportunity.

Learn to spot the terminology these scammers use in their correspondence and it will help you to avoid becoming their next victim.

About this article

This article is of the opinion of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your blog, website, or ebook. Read my other articles on www.robertastewart.com

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Your Money Your Responsibility 

Your Money Your Responsibility 

Written by R. A. Stewart

Your money is your responsibility. It is your choice what you do with it once it becomes yours, but you have the responsibility of how you manage your money. Being a good steward of money means being responsible for how you use it. This requires maturity.

Here are the main factors which will help you become a good steward of money.

  1. Gaining a financial education

It is your responsibility to become financially literate. In this day and age where there is so much information available on making the most of your money, it is inexcusable to be financially literate. 

All it may take for you to find books on personal finance is to just visit your local library. If you are prepared to spend a bit of money then you may find some good books at your local bookstore.

Frances Cook, Mary Holm, and Martin Hawes are excellent New Zealand authors of Financial books.

  1. Make your own decisions

Some people will get others to make decisions on their behalf, so that whenever something goes wrong they always have someone to blame. “You told me to invest in such and such company and now I have lost my money.” It is your money so that it is your responsibility to make the most of it. 

  1. Accept your own mistakes

Investing is a learning process. In order to become a good investor you need to invest and gain experience doing so. Mistakes will be made. The important thing is to learn from them and move on. 

  1. Living within your means.

It is your responsibility to live within your means. This means that if you choose to get married, have kids, or buy a car, then it is your responsibility to ensure that you are in a suitable financial position to do these things. 

  1. Pay all of your bills

Everyone has fixed costs such as utilities, phones, and whatever. It is the responsibility and the mature thing to pay all of these on time. A bad credit rating can hurt your chances of obtaining a mortgage in the future.

  1. Save a portion of your income

It is your responsibility to save a portion of your income to provide some kind of cushion for a future financial setback. Establishing a rainy day fund is always suggested by financial experts.

  1. Listen to wise advice

The markets went up and down and they were all down after President Trump announced tariffs on overseas imports to the US. The experts in New Zealand were advising investors to remain calm during this time and not to react to the market slide by changing funds. “This is the nature of the markets,” they said. Many did change funds and when the markets recovered the losses, these people missed out on the gains. As a result, their kiwisaver balances took a hit. 

Your financial plan has to take into consideration the market volatility. The question is, “If the market dropped 5% or whatever, how will this affect my lifestyle?”

If you have ten or so years remaining till you retire then the answer is that it won’t in the short or medium term. 

It is your responsibility to heed advice when it is given but at the same time have the common sense to know whether the advice is good or bad.

Once you have gained enough experience at investing you will have the know how to discern whether advice is good or bad and what the motive is behind the person giving the advice.

About this article: The opinions expressed are those of the writer and may not be applicable to your personal circumstances therefore discretion is advised. You may use this article as content for your blog/website or ebook.

Read my other articles at www.robertastewart.com

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9 Things you should never borrow money for

 

Written by R. A. Stewart

There are some things which you should never borrow money for because they are considered to be bad debt. The reason why they are considered to be bad debt is that they do increase your wealth but rather decrease it. The value of the item which has been purchased with borrowed money decreases over time. 

Another thing which you should not borrow money for is risky investments which may or may not make you rich but also have the potential to send you to the poor house if the value of the investment plummets. Purchasing crypto currency is a classic example.

Here is a list of items you should never borrow money for.

  1. Cryptocurrency

Only discretionary spending money should be used for purchasing cryptocurrency because of its volatile nature and that nobody really knows what the future holds for crypto. The problem with borrowing to invest is that the liability (the loan) is sometimes more than the value of the investment. This occurrence is on the cards if you borrow to purchase Bitcoin and then the price of Bitcoin crashes.

It is exactly what happened to a lot of investors after the 1987 sharemarket crash. One man in our town borrowed money for shares using the equity in his home and when the market crashed in 1987 he was left with a debt.

  1. A wedding

A wedding is something you should never borrow money for. If a couple cannot even afford to pay for their own wedding you have to question whether they can afford to get married at all. A debt is a bad start to a married life that couples can do without.

  1. An overseas holiday

This is just dumb debt! Taking a holiday with someone else’s money is just irresponsible. There is nothing to show for the money apart from a debt which will be made to get ahead.

  1. A wedding ring

Another thing which is a no go area for borrowed money. If a person cannot even save for a wedding ring then getting married is not a wise decision. If the recipient of the ring expects something expensive then you have to question her motives. This is something that needs to be discussed between the families involved. 

  1. Gifts

Thousands of people go into debt at Christmas time and most of it is spent on buying gifts for others.  Advertisers encourage people to spend, spend, and spend more money and very often it is borrowed money that is being spent. No one should be pressured into spending money in this way or anything else for that matter. If you are then you can always plead poverty to your family.

  1. A new car

Borrowing for a new car is a complete no no because once you take possession of the car its value has dropped considerably and the vehicle is worth less than the amount owing on it. This is called “Dumb Debt.” If you cannot even save for a vehicle then you have to ask yourself this question, “Can I afford to run a vehicle?” The costs of keeping one on the road will drain you of your finances like nothing else will.

  1. Electronics

This is a complete No No as far as borrowing money for. Electronics such as TV sets, radios, smartphones and the like are stuff that you only buy with your discretionary spending money. Follow this rule, “If you don’t have the money you don’t buy it.”

  1. Hobbies

This is something you only do with your own money, not someone else’s money. Some hobbies can pay for themselves, such as stamp collecting. If you are able to swap with other collectors or even sell some surplus stock it can at least be self funding. Other hobbies can cost you an arm and a leg and be a hindrance to your financial goals.

  1. Vet bills

Keeping pets is not cheap and becoming too attached to them can be costly. Many people have spent a fortune on vet bills for their cat or dog when the sensible thing to do is to have it put down.

“If you don’t have the money you don’t buy it” is a good rule to live by. It is called “Living within your means.”

About this article: You may use this article as content for your blog/website or ebook. Feel free to drop me a message and give me other things which you should never borrow money for. Read my other articles on: www.robertastewart.com

 

The Benefits of Having a Travel Card

A dedicated travel card makes trips smoother and more secure. Unlike regular debit cards, travel cards often offer competitive exchange rates, low foreign transaction fees, and multi-currency support—saving you money on conversions.

If lost or stolen, travel cards can be frozen instantly via an app, protecting your funds without affecting your main bank account. Many also provide emergency cash replacement and 24/7 support.

Preloaded with a set budget, travel cards help control spending and avoid overspending. Some even offer rewards or insurance perks. For worry-free travel, a travel card is a smart financial companion.

Join Wise Here

https://wise.com/invite/dic/roberts10486

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Kiwisaver Benefits for KIwis

Are you throwing money away?

 

Written by R. A. Stewart

 

New Zealand’s kiwisaver scheme is a retirement scheme for New Zealanders. There are many features and benefits of joining kiwisaver.

What is the difference between a feature and a benefit?

A feature of kiwisaver is that the money is locked up until you reach the age of 65.

The benefit is that you will have a nest egg waiting for you when you retire.

Here is the main benefit of kiwisaver. 

The government will deposit $520 into your kiwisaver providing your contribution is at least $1040 during that financial year.

People who are not contributing to kiwisaver or have not even joined are missing out on all of this money.

Why?

It is hard to fathom why anyone would not join kiwisaver. 

There will not be a single person who reaches the age of 65 who regrets that they contributed to kiwisaver all of their lives.

It is a matter of asking the question, “What will my future self thank my present self for”?

The key to kiwisaver is to keep contributing irrespective of what the markets are doing. 

Investors will be rewarded for their consistency.

Some people have prioritized other things such as sky TV, cats and dogs, lotto, smoking, and booze over their future prosperity.

It is all about choice and it is something everyone has. 

Any New Zealander is able to join kiwisaver.

Any one of any age, from the day a baby is born to those already retired. 

It is important to point out that only those aged from 18-65 are eligible for the government money. It is still worthwhile for those age groups which are not eligible for the government top up to join kiwisaver because it will give the young ones a head start in life and who knows, a rich uncle may leave them some money in his will. It doesn’t pay to fall out with your family by making false allegations about your cousin.

The retired folk can treat kiwisaver as an investment; one which you have access to.

There are circumstances when you are able to withdraw money from kiwisaver, they are:

(a) For bond money if applying for a flat to rent, but only under thirty year olds are eligible to apply.

(b) You may use a portion of your kiwisaver as a deposit on your first home. Most people who take this option are in their thirties.

(c) Moving overseas permanently.

(d) Terminal illness

(e) Hardship

There are some hoops to jump through when trying to withdraw your kiwisaver for hardship reasons. 

There are several books on personal finance which I recommend with my favourite New Zealand authors being Frances Cook, Mary Holm, and Martin Hawes. Check them out. Maybe your local library will stock their books.

With so much information on personal finance available there is no excuse for being financially illiterate. Not joining kiwisaver when you have the means to is just stupidity.

If you are one of these people then you are just throwing money away

About this article:

You may use this article as content for your blog, website, or ebook.

Read my other articles on www.robertastewart.com

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The Percentage Formula

The Percentage Formula

Knowing how to work on percentages is a benefit in the area of finances.

If you are figuring out the return of your investments, you will need to know how to calculate percentages. 

Here is an example:

Your return on an investment of $100 is $7. The formula for working out your return in terms of percentage is:

(a) 7 multiplied by 100 =700

(b) The answer is a being divided by 100= 7%

Your return $7 is multiplied by 100

Your investment of $100 is divided by 700

Shirley has $5,000 in her personal savings account and has received $100 in interest off that money. In terms of percentage, what is her return on that money?

(a) $100 multiplied by 100 =$10,000

(b) 10,000 divided by 5,000= 2

Shirley has received 2% interest on her money.

This formula does not include tax so supposing Shirley pays 17.5% tax.

The formula for working out the tax which needs to be paid on interest is straight forward; it is:

Interest received (income) multiplied by the individual’s tax rate (17.5%).

In Shirley’s case, this is $100 multiplied by 17.5% equals $17.50.

Her net return on her money is $82.50.

17.5% is 0.175

An example such as this shows us the futility of just leaving your money in the bank without investing it. The combination of inflation and taxation means that those who do not invest are losing the value of their money. 

Saving money is a good habit to get into, but it is also important to get into the habit of investing. This increases your financial literacy.

Some people do not invest their money because they are afraid of losing their money, yet they will buy lottery tickets which is a sure-fire way of losing. 

Knowing how to figure out percentages is a skill which will assist you in different areas of your life.

Here are some examples of where knowing how to calculate percentages will be a valuable skill.

Shopping & Discounts: Calculate discounts during sales (e.g., “30% off”).

Tips & Service Charges: Determine how much to tip at restaurants (e.g., 15% or 20% of the bill).

Tax Calculations: Compute sales tax (e.g., 8% tax on a purchase).

Budgeting & Expenses: Track spending (e.g., “20% of my income goes to rent”).

Loan & Credit Card Interest: Understand interest rates on loans or credit cards.

About this article:

You may use this article as content for your website/blog or ebook. 

www.robertastewart.com

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Leaving a legacy for generations

Leaving a legacy for generations

Written by R. A. Stewart

“A good man leaves an inheritance for his children’s children.” Proverbs 13:22

I watched a TV program recently about a tree farmer in Finland whose family has been harvesting trees for over 300 years. As he told the reporter, he harvests the trees his grandfather planted while he plants the trees that his grandchildren will harvest. This went on for generations in this family.

What we do today will affect the future generations.

My great grandfather operated a brewery near Greymouth on New Zealand’s South Island. Prior to this brewery getting established, he had financial problems after his first brewery in Westport, sixty miles north of Greymouth was blown over by a south westerly wind. This occurred in 1879. 

He managed to get back on his feet and get another brewery going within 10 years.

This proved to be successful and he built up his assets which included a farm 20 miles north of the brewery.

He also had a bit of money behind him as well.

Future generations have been blessed as my greatgrandfather left his farms to his sons, who in turn left it to their sons. One of his farms is being run by his greatgrandson.

Leaving a legacy such as a farm will enable future generations to make a living off the farm as their parents and grandparents did.

However, when it comes to leaving them a sum of money, should you?

It all depends on whether they are good stewards of their own finances. If they cannot handle even handling their own money then they cannot be trusted to handle yours. 

A responsible and mature person will have joined kiwisaver, the New Zealand retirement scheme. If from New Zealand or their country’s retirement scheme if they are from a country other than New Zealand.

Now consider this, would you leave money to someone who:

Is not joined to a retirement scheme yet has subscriptions to netflix and satellite TV?.

Is not interested in obtaining a financial education yet buys a lottery ticket every single week?

Spends their money in the pub?

Will only spend their money on their hobbies?

Has no savings of their own yet smokes cigarettes?

Any person with any sense will know the character of their own family and ensure that their estates are distributed to those who are responsible.

Some folk will have all kinds of excuses for why they are in a financial mess, but not one of them will admit that they are living beyond their means. People who fit in the categories listed above are all living beyond their means.

If you cannot even be trusted to handle your own finances then you cannot be trusted with what belongs to someone else.

About this article:

This article is of the opinion of the writer and may not be applicable to your own personal circumstances, therefore, discretion is advised,

You may use this article as content for your blog, website, or ebook. Read my other articles on:

www.robertastewart.com

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“Holiday Crisis Solved: How to Handle a Lost or Stolen Debit Card”

What to Do If You Lose Your Debit Card While on Holiday

Losing your debit card while traveling can be a nightmare. Whether it’s stolen, misplaced, or simply left behind at a café, the sudden loss of access to your funds can leave you feeling vulnerable—especially in an unfamiliar place. However, acting quickly and methodically can help you minimize financial risks, secure your account, and find alternative ways to access money.

Here’s a detailed step-by-step guide on what to do if you lose your debit card while on holiday.

1. Stay Calm and Retrace Your Steps

Panicking won’t help, so take a deep breath and think back to where you last used your card. Check your wallet, bags, hotel room, or any recent shops or ATMs you visited. Sometimes, cards are simply misplaced rather than stolen. If you’re sure it’s lost or stolen, move to the next steps immediately.

2. Contact Your Bank to Block the Card

Time is critical—the sooner you report the loss, the lower the risk of fraudulent transactions.

  • Call your bank’s 24/7 emergency hotline (save this number before traveling).
  • Provide your account details and request an immediate card freeze or cancellation.
  • Ask if any recent suspicious transactions have occurred.

Many banks allow you to block your card via their mobile app, which is faster than calling. If you don’t have international roaming, use Wi-Fi to access online banking or ask a local shop/hotel to borrow a phone.

3. Monitor Your Account for Fraud

Even after blocking your card, check your account for unauthorized transactions. If you spot any:

  • Report them to your bank immediately—they may reverse fraudulent charges.
  • Change your online banking password for extra security.

If your bank offers instant transaction alerts, enable them before traveling to detect fraud early.

4. Arrange a Replacement Card or Emergency Cash

Ask your bank about:

  • Emergency card replacement – Some banks can courier a new card internationally (though this may take days).
  • Temporary virtual cards – Useful for online purchases if your bank supports digital wallets (Apple Pay, Google Pay).
  • Emergency cash withdrawal – Certain banks partner with global networks (like Western Union) to provide emergency funds.

If you’re traveling with a companion, consider transferring money to their account temporarily.

5. Use Alternative Payment Methods

While waiting for a replacement, rely on:

  • A backup travel card (always carry a second card from a different account).
  • Cash (withdraw extra early in your trip as a precaution).
  • Prepaid travel cards (load funds before traveling).
  • Mobile payments (if your phone supports contactless payments).

6. File a Police Report (If Necessary)

If you suspect theft, file a report at the local police station. Some banks or travel insurance providers require this for fraud claims. Keep a copy for your records.

7. Prevent Future Issues

To avoid this situation again:

  • Carry multiple payment options (two cards + cash).
  • Use a money belt or RFID-blocking wallet to deter pickpockets.
  • Store bank contacts securely (in email or a password manager).
  • Enable transaction alerts for real-time monitoring.

Final Thoughts

Losing a debit card on holiday is stressful, but quick action can prevent financial loss. By staying calm, blocking the card immediately, and using backup funds, you can minimize disruption and continue enjoying your trip. Always prepare for the worst—carrying multiple payment methods ensures you’re never left stranded.

Safe travels, and may your next trip be hassle-free!

The Benefits of Having Two Debit Cards

Carrying two debit cards while traveling provides security and convenience. If one card is lost, stolen, or blocked, you’ll still have a backup for purchases and withdrawals. It also helps avoid issues like ATM declines or foreign transaction limits.

Additionally, you can separate expenses—using one card for daily spending and another for emergencies. Some banks offer better exchange rates or lower fees on specific cards, so having two allows you to optimize transactions.

With mobile banking, managing multiple cards is easy. Dual debit cards ensure financial flexibility, reducing stress during trips. Always keep them in separate places for extra safety!

The Benefits of Having a Travel Card

A dedicated travel card makes trips smoother and more secure. Unlike regular debit cards, travel cards often offer competitive exchange rates, low foreign transaction fees, and multi-currency support—saving you money on conversions.

If lost or stolen, travel cards can be frozen instantly via an app, protecting your funds without affecting your main bank account. Many also provide emergency cash replacement and 24/7 support.

Preloaded with a set budget, travel cards help control spending and avoid overspending. Some even offer rewards or insurance perks. For worry-free travel, a travel card is a smart financial companion.

Join Wise Here

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3 Factors which determine your investment strategy

ABOUT THIS ARTICLE

Reaching your financial goals is not just about saving money; it is about investing your savings to help grow your nest egg. Where you invest your money can help speed up the process of saving because the capital gains on your savings can help you to reach your savings goals earlier. There are three factors which determine where you should invest your savings. This I discuss in further detail.

The information here is of the opinion of the writer and does not constitute financial advice. If you require financial advice see your bank manager or other qualified professional.

3 Factors which determine your investment strategy

You may be wondering what is the right investment strategy for you, but without knowing anything abut you, any advice on which investments are right for you may in fact be the wrong ones. There are basically three factors that determine which are the right investments for you, they are:

  1. Your age
  2. Purpose for the money
  3. Your risk profile

Starting with your age. It would be rather silly of you to invest all your money in growth funds if you are aged 65 because if the market takes a dive such as was the case during the 1987 share market crash and to a lesser extent, the GFC during the early 2000s you have less time to recover from these setbacks whereas the young ones have time on their side. 

Then decide whether you require the money in the short term, medium term, or long term.

Short term would up to a year.

Medium term is 1-5 years

Long term is longer than five years

Short term expenses would be, a bank account for emergencies, a holiday within a year, dental expenses, or t pay for the kids schooling for a year.

Medium term would be savings for a car.

Long term would be your retirement fund, saving for a house deposit, or saving for the trip of a lifetime.

Your risk profile is a determining factor in where you invest your money. If the thought of the share market taking a dive will give you sleepless nights then investing growth stocks in the share market is not for you. A better option would be managed funds where you will be given a choice between growth, balanced, and conservative funds.

It is important not to get into debt for there is a cost to debt and that is interest. Interest adds to the cost of goods bought with borrowed money, and this adds up to a fortune during a lifetime of borrowing for consumables. This is called bad debt because the value of the item declines over time.

There is such a thing as good debt though and this is your first home because the value of the property increases during the lifetime of the loan but even this is not always a good option for some people if you live a kind of transient lifestyle. 

“Everyone is to their own,” so only you know what makes you tick, so your personal circumstances are the determining factors which govern where best to invest your savings.

You must do your homework before you invest in anything, whether that is the share market, managed funds, or gold. There is so much information available on just about everything, and that includes finance. It is just a matter of learning the ropes and having a financial strategy which suits your personal circumstances.

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Most people are able to save money but having goals and selecting the right investments for your savings can help increase your assets and enable you to reach your goal faster. For finance related articles, visit: www.robertastewart.com