Set Yourself up to Invest in the New Year

As 2018 comes to a close, it’s time to take a hard look at your finances. Whether you’re an experienced investor, or just curious about the opportunities investing can bring, the benefits of improving your financial health, are considerable. Experienced financial advisor Michelle Niziol gives her best tips for setting yourself up to invest and succeed in the new year.

Set goals and make a plan
Whether you’d like to start diversifying your investments, or simply want to maintain already healthy account balances, simply thinking about and setting your goals is the first step to making them a reality. Once you’ve set your goals, the real work begins: speak to your financial advisor and break down these financial goals into monthly tasks. If you are diversifying your investments, the advice of a financial advisor is critical. Their experience will align your expectations with reality, and their advice will be invaluable during any market hiccups.

Calculate your net worth
Net worth is a relatively simple calculation, but it can give you valuable information about the state of your finances. To calculate your net worth, add up all your assets (homes, cars, jewelry, etc.) and subtract your debt from that figure. If the figure is positive, you’re in a good position to invest in 2019. If the number is negative, there is no need to panic, but consider speaking to a financial advisor to come up with a plan to pay off your debts.

Review your investments
Take a look at your investments, and make sure that they still align with your goals, and your tolerance for risk. When it comes to investments, risk can often change, so a low-risk investment can quickly become a high-risk investment in a year’s time. For example, if the stock market had a particularly good year, you may find that a large portion of your equity is in stocks. It’s perfectly natural for your risk comfort-levels to fluctuate year on year, so speak to a qualified financial professional to see if it’s time to rebalance your portfolio. 

Liquify some assets
In a fluctuating market, it’s important to have access to the cash you’ll need without being forced to sell valuable assets. Set aside a portion of savings (I usually recommend around a year’s salary) in an easily accessible account, to prepare yourself for any situation.

Keep an eye on the economy
2018 has been a year of changes to legislation and economic changes. Keeping up with these changes is critical for assessing both current and future investments, as regulatory changes can affect income significantly. In 2018, new legislation was introduced that changed tax relief as well as tax brackets for buy to let landlords, so landlords should consider these changes when making investments in 2019.

Keeping an eye on the economy will help you identify new trends in investment, which you can discuss with your financial advisor. I’ve found that clients who take an active role in their investments achieve greater success and a heightened understanding of their assets. As an advisor, I’m able to give clients my professional advice, but ultimately, the decision is their own. Taking ownership of these decisions is incredibly liberating, and financial advisors will appreciate that you’ve taken the time to do your homework. The financial papers are a good place to start.

This post appeared on The Money Pages.