Investment Planning

Perth financial planners are often asked to oversee real estate portfolios for those who decide to use real estate as an investment strategy. As with any investment vehicle, real estate isn’t for everyone. In addition, we are not allowed to provide advice in this blog because everyone’s financial situation is different. However, we would like to tell you about four fears that often keep people from including real estate in their investment portfolios.

Fear of Paying Too Much

The axiom “buy low, sell high” has probably been around for as long as people have bought and sold things. Some people get so bogged down in research that they can’t make a decision to buy any particular property. Research is important, but so is action.*

Fear of Buying the Wrong Property

People are also afraid of buying the wrong property. This could be the wrong house or the wrong neighbourhood. This can often be overcome by creating a firm plan and sticking to it.*

Those who are looking for financial planning help in Perth are bombarded with unsolicited advice on a daily basis. At Approved Financial Planners, we don’t give advice on our blog, but we can educate consumers about their choices and what they may want to consider when looking for a financial advisor.

When we have an individual consultation with an investor, one of the most important considerations is their risk tolerance. We find out how comfortable a client is with risk so that we can create a financial plan that they can live with. A client who is uncomfortable with risk is going to be steered towards a more conservative approach. A client who is comfortable with risk will be steered into a more aggressive approach.

Generally, the higher the risk of an investment, the higher the potential reward. This is a fundamental of investment. However, some strategies are commonly used to shield even an aggressive investor from undue risk.

Long-Term Timeframe

Long term investments carry less risk because fluctuations in any market tend to even out if one waits long enough. This doesn’t work 100% of the time, but time can be considered to be a valuable asset in investing.

When it comes to financial planning, many Perth residents have a “can do” attitude. It seems like a lot of people try to go the “DIY route” when it comes to making investments. While this is admirable, investing is complicated and competitive. Amateur investors often find themselves competing against professional investors who invest for a living. It is easy to guess who usually wins and who usually loses in this scenario.

Here are five common mistakes that DIY investors make.

Failure to Calibrate Goals

The two most common variations of this are too many goals and unrealistic goals. The most common is expecting to much of a return in too short a time with too little to invest. Often, people set a budget that leaves them a miserable current lifestyle. Eventually, they can become bitter towards their budget and derail their own investment plans.

Failure to Invest Sufficient Time and Effort

It takes time and effort to create a budget and an investment plan, with or without a professional investment planner. This could also be called, “Failure to treat investment like a business.”