5 tips for reviewing your risk profile

5 May 2015

We all want the dream house, the luxurious car and a substantial retirement package. Like many aspirations, one needs to be smart about the financial decisions made to achieve these goals.

It is important to make sure you make informed decisions when reviewing your risk profile. Here are a few things you should consider.

1. Use a Financial Adviser

Before you embark on any major financial decisions, you should seek the advice of a financial planner.  Your long-term goals must form the crux of any financial decisions you want to make. A financial adviser who can help you determine what your risk profile is and what investments would be in your best interests and give you greater returns. They will consider factors like your age, marital status, current and future earnings, goals, and future plans.

2. Choosing your Investment Vehicles

There are a variety of investments or products you can use to get back on track. Stocks, bonds, money-market accounts or savings accounts are common investments you can consider. Start small, the newly introduced tax-free investment savings accounts which allow you save for that dream house or that holiday.

3. Vary your Portfolio

To spread the risk in your investments vary your portfolio. Investments that usually have higher returns have higher risks. By applying for investment vehicles through Smartcents, you will receive expert advice from financial planners telling you where you can invest your money safely.

4. Limit your Risks

If you have already undertaken some financial risks or commitments don’t be alarmed. Determine the level of risk associated with your investments. Generally, stock is regarded as the riskiest investment due to the volatility of the market which drives the value of stock.  “Get rich quick” schemes never work! Avoid them! Ensure you select your investments wisely.

5. Self-reflection

Getting on the track for financial freedom comes with its challenges. Many consumers are overwhelmed by inflation rates and bad investments. It’s essential that you do some self-reflection and determine what your risk profile looks like. Make a list of your financial commitments (including insurance), set some attainable goals and what income you have available to achieve these. Maintain positivity, make informed decisions and you too can achieve your goals.

Smartcents by DebtBusters is making it easier for you and your family’s financial future. By simply logging on to www.smartcents.co.za  and clicking on the financial planning tab, you will be able to apply for a range of financial products that will protect you and your family including information on different products and how it can benefit you, so that you make the best financial decisions. From retirement annuities to unit trusts, securing your financial future is a click away!

Smartcents by DebtBusters – making sense of your finances.

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