Rather than provide hot stock tips, I’d much rather provide timeless principles to guide you on your financial journey.
In order to retire, and certainly to retire earlier than age 65, you need to be thinking about your investments and financial goals. Education is fundamental to your financial success.
You should not be outsourcing the control of your financial future. If you have outsourced your finances to a planner, accountant or if you simply just don’t care, you’re setting yourself up for failure. Nobody cares about your money as much as you do. Only you know the true specifics of what you are wanting to achieve.
It is important to start investing as soon as possible in life, so that you (a) benefit from the power of compounding, and (b) so that you have time to make mistakes and more importantly, learn from these mistakes. If you leave the learning too late in life, it may be too hard to catch up. Don’t forget, one financial mistake could cost you everything, so it’s best to learn from small mistakes now while you have time to recover.
Each asset class has different fundamentals, and require different approaches. Therefore, the first tip is to research and study the asset classes, and find out if you have a particular preference for each asset class.
Start small where possible and continue to learn along the way. As is often the case, you learn more when your own money is invested and you are ‘at risk’ of losing capital.
Although the risk increases as you invest in assets outside of cash, the biggest risk is not investing at all.
A scatter gun approach to investing is unlikely to work. Having some money invested here and there, doesn’t typically work for most people. I would encourage you to research thoroughly before investing.
Making random investments on a whim or based on a hot tip from your friend at the BBQ is not investing, it’s gambling.
If you don’t understand it, you shouldn’t be investing in it.
In addition, if you have no interest in an asset class, be wary of investing in it.
Over time, try to diversify your investments. If you choose to invest solely in property, try to invest across different capital cities, residential and commercial property. If you choose to invest in shares, I would recommend investing across different businesses, different industries, different countries. If you are unwilling to specialise in property or shares, and would prefer instead to take a more passive approach of index funds, even then I would still consider diversifying by investing in different index funds and different indexes for international countries.
Always take an adaptable approach to investing. Businesses change, laws change, the environment changes, all these things means what works now may not work in the future.
If you decide to specialise in an asset class, commit to becoming an expert in your chosen specialisation.
Past performance is not an indicator of future performance, but the trend is your trend.
Do not set and forget.
Invest for the long term - it’s time in the market, not timing the market, that really counts
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