Just starting out on your investment journey?

Have you been investing for a while and need a refresher?

A smart investor takes the time to be clear on the basic principles of investing and uses these to improve investing skills over time and more importantly, to avoid the costly pitfalls.

• Where are you now?
• Where do you want to go?
• How are you going to get there?
• A personal investment plan

 Where are you now?

The first step on your journey to successful investing involves some calculations and analysis:

• Budget basics – know whether you have the capacity to invest or not
• Net worth – get a clear picture of your starting point
• Psychology of investing – know your investing strengths and weakness

 Where do you want to go?

Once you clarify your start point it is important to understand where you are going and why:

• Investing goals – clarify your goals and the time you have available will help determine your choice of investments
• Risks – understand risks to determine your sleep at night factor
• Power of compounding – understand how this powerful concept can help you reach your goals

 How are you going to get there?

Now that you have identified your goals and tolerance for risk you should:

• Investment structure – consider which strategy might best suit you
• Asset classes – understand how they fit into the big picture
  

A personal investment plan

An investment plan defines the strategy and methodology to manage your wealth to fund various expenditures throughout your lifetime. The steps set out in the AIA’s Investment Planning Workbook will help you think about the ingredients of your personal investment plan. The workbook was used as a resource for the 2015 National Conference, but is a useful stand-alone document, with an appendix of references for further reading.