By now all of us who seek to progress financially should know that the money we earn should be segmented in such a way that we incrementally build up more assets and/or cash reserves. If you don’t know, here’s a quick rundown for you before I get into the main discussion of how you should plan ahead for your higher-risk investments segment of your personal financial management:
How to segment your money for incremental financial growth
The income you get should be allocated to different areas in a specific way if you want to look at the net value of your assets a few years from now to find that that value has increased as opposed to remaining the same or shrinking. So with the income you get, the bulk of it would likely go to your living expenses, which you should try to minimise to well below your means so that an amount equal to your living expenses can be put away as pure savings.
The savings are so that you have a safety net to fall back on should there be a temporary reason behind you losing your ability to keep earning your income. The idea is that the savings you’ve built-up can sustain the standard of living you’ve become accustomed to.
So that makes two segments: living expenses and savings. The remaining two segments should then be divided into short-term and higher-risk, and long-term investments. Long-term investments are separate from your pure savings. This part should consist of those that can probably yield slow but steady long-term gains. A few examples include fixed deposits, real estate in the form of apartments, buildings or even land (such as these Ranches for sale), and precious metals like gold, silver, platinum, etc.
However, people mostly believe every investment is a risk and may cause losses. Some may even say that there is very little difference between investments and gambling since the market keeps changing and there is no guarantee whether you will earn any profits or not. This is a misconception for those who do not fully understand the nature of investing as an activity. Truthfully, gold compared to gambling will most probably get you a better monetary yield. Similarly, even high-risk investments like stock trading can generate positive results since there is an option of studying the market and putting money into a company with growing shares.
Now, this brings our focus back to the short-term investments, which are the higher-risk investments on which the focus of this post is.
High-risk investments could be stocks, mutual funds, maybe cryptocurrency, etc., which may see considerable variations in investment price regularly. In that case, you may have to be vigilant about when you are getting good profits to withdraw your money. High-risk investment can help in diversifying your portfolio to ensure you are not risking all of your assets. You can also take assistance from a professional for financial stability and profitable investment. You can check out companies for investment Red Deer or near your location to get advice and guidance in high-risk investments.
The Annual Plan
Your higher-risk investments are those ventures into which you put money you’re willing to lose, in other words you should actually expect to lose money. This doesn’t mean you should just throw this money away like how rappers do when they say they’re “making it rain” in the club or something senseless like that. What it means is that a very small portion of your income is set aside for high-risk / high-reward “investments,” like gambling for example, whether you choose to gamble online or indeed if you’re more of a sports enthusiast who has an appetite for sports betting. Even buying a lottery ticket counts as a higher risk investment.
Now, since higher risk investments are engagements in which you don’t want to spend too much of your time planning, the best approach is to plan for them in account for the whole year ahead. You should know now for example that come Easter time, your higher-risk investment allocation is perhaps going to be spent on playing online Easter slots, for example, just so that you don’t waste any of your time during the year trying to figure out where to put this high-risk investment money next.
Otherwise your precious time during the course of the year should be allocated more to the management of your more solid income avenues and investments.
