5 Ways to Boost Your Wealth
In the face of tough economic conditions, your money and your investments need to work harder so your wealth doesn’t take a hit.
So what practical steps can you take to withstand international challenges and ideally boost your wealth at the same time?
Here are five recommendations for you:
Diversify your investments
Spreading your investments across different industries, locations and asset types can significantly reduce your impact to economic volatility. By having a good spread of cash, property, bonds and shares, you’ll be in a stronger position to absorb the shocks caused by any financial disruption, and build your wealth even if one aspect of your investments is taking a hit. Market conditions will vary across the board, so it’s prudent not to put all your eggs in one basket.
Take control of your pension
For many of us, retirement might seem a long way off, but if you’ve had various employers over the years and built up several pensions during your working life, it’s time to get to grips with them as soon as you can. It might be worth getting professional financial advice about your options, such as consolidating your pensions, so you can be sure the money in each pension pot is delivering the maximum returns for you.
At the same time, you can boost your long-term wealth by paying more into your pension. Again, your financial planner can talk you through the options that are open to you to help you get the best returns. Remember though, that pension rules can change over time. For instance, the minimum age for accessing workplace and personal retirement savings is set to increase from 55 to 57 in 2028, so it’s worth bearing this in mind when planning for the longer term.
Use your tax allowances
Many different tax allowances can help you get the most out of your money, and planners know the steps necessary to find the most efficient options.
Taking steps to reduce your inheritance tax liability, such as by making full use of your annual gift allowance, is another option worth looking at. Your financial planner will be ideally placed to discuss all the different options with you, so you can make your money work harder for you.
Set financial goals
Knowing exactly what you want to achieve can give you a sense of clarity over your finances and what steps you should take. For example, if your ambitions are relatively modest, you may decide it’s not worth exposing yourself to a high level of risk, and you can make proportionate and realistic financial decisions.
You should then make a point of reviewing your financial goals every few months, perhaps at the beginning of each new year, so you can make sure you’re still taking the right steps to maintain or boost your wealth.
Stick to a budget
Regardless of whether you’re on a modest or large income, this is a crucial step to take. Monitor your spending for a period of time to see where your money is going. You may conclude you’re wasting money on discretionary purchases that could be invested more wisely.
This level of visibility can completely change your perspective when it comes to your money, helping you make smarter decisions about how you spend and invest both in the short and long term.
Finally, we’d urge you not to panic. The key is to remain calm even during tough economic times. While it’s not unusual for investors to get jittery, you should remember that the markets go up as well as down, so cashing in too early could be costly in the long run. Stay calm and don’t let your emotions override your good sense, as simply doing nothing could be the best option for you at any given time.