Have you ever been presented with multiple options to grow your wealth and felt frazzled because you couldn’t decide what path to take? There’s a reason for that. Researchers from the Kellogg School of Management at Northwestern University have found that when we are offered too many choices, we may feel dissatisfied with our decision or even paralysed with indecision.
When there are so many choices available, how can you be sure that you are making a smart investment decision?
Be Honest with Yourself
First, set aside time to take an honest look at your current financial situation and consider your personal risk appetite, as well as make a list of your top priorities and goals. Are you imagining what your golden years after work will look like, or have you made a resolution to travel more often each year? These may not seem like financial goals at the moment, but it will help if you can anticipate future needs like these and add them to your list.
Once you have identified your short-term and long-term needs (such as enrolling your child into a world-class university), as well as larger life goals (like buying a new home), you will be able to come up with a financial plan that helps you to manage your resources.
Plan Beyond Your Future
As you age, your priorities will naturally change. As Steve Brice, Standard Chartered’s Chief Investment Strategist explains, the closer you get to retirement, the more you will typically begin to prioritise wealth preservation. However, it’s worth always looking at the big picture, not just in terms of your life but also the lives of your loved ones. Brice explains that “as life expectancy increases, you may need to increase the allocation to stocks, especially if you’re looking at handing down your wealth to younger generations.”
Don’t Put All Your Eggs in One Basket
A common alternative to bank deposits is insurance solutions, typically long-term products such as annuities and endowments. But what if you need your money in the case of an emergency? This is why it is crucial to diversify your investment across several solutions, explains Brice. Furthermore, “one of the most common ways to protect and increase wealth is through insurance solutions, such as annuities and endowments, which are typically long-term products offering defined returns if held till a certain date.”
Are you ready to maximise your savings and make better investment decisions? Get in touch with Standard Chartered Priority Banking today to grow your wealth.
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