Saving and investing are both different ways of funding your future.
It is important to have a combination of savings and investments to diversify your assets and reduce the amount of risk you are exposed to.
Build up an emergency fund
Cash savings generally have low returns due to interest rates being low. This means that cash savings often lose value in real terms as the returns do not keep up with inflation. However, it is important to have some cash savings for an emergency fund. We usually recommend that you have 6 months of your essential expenditure saved in cash in case of emergencies such as being made redundant.
What are investments?
Investments are for the longer term and often involve more risk. However, investments give the potential for far greater rewards and are a possible option to help you combat the effects of inflation and help you to make more of your money.
What are you saving for?
The most important thing you need to decide when choosing whether to save or invest your money is timeframes. What are you saving for? When will you need to access the money? Do you have more than one saving goal with different time frames?
At Four Wealth Management, a financial adviser will work with you to determine what your financial objectives are and then let you know the best options to make the most of your money and reach your financial objectives.
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Shorter time frames usually mean you will take less risk with your investments and possibly have to accept lower returns on your investment in return for security.
A financial adviser at Four Wealth Management will recommend investments that suit your timeframes for your objectives. Your investments will be diversified to help reduce the amount of risk you take.
Book a no-obligation meeting now
Investing for the long term
Some people do not have an exact goal that they are saving for. They know they can afford to invest over a long period and hopefully their assets will grow in value over time. Retirement is a good example; you do not have an exact figure in mind that you want to reach and you are unlikely to know exactly when you want to retire. But you know that the more that you save as early as possible, the greater time period your money has to hopefully grow in value and provide you with more income at retirement.
For help on investing for your retirement, book a no-obligation meeting now
How much can I save or invest?
Once you have built up your emergency fund, you can work with a financial adviser at Four Wealth Management to determine your income and expenditure and calculate how much you can comfortably invest for the future each month.
Circumstances may change and the amount you can afford to invest may fluctuate. For example, the current cost of living crisis and rapidly rising inflation may mean you can save less than normal. Difficult financial times such as the inflation crisis and Covid-19 do remind us that it is important to have savings and investments built up.
When should I invest?
In an ideal world you will be saving for the short term and emergencies and investing to meet your medium and long term financial objectives. This will provide you with financial security and improve your financial wellbeing knowing you can cover any short-term unexpected costs while taking steps to be on track for a financially secure future. Therefore, a combination of saving and investing is key to financial success.
Saving and investing are both different ways of funding your future.
It is important to have a combination of savings and investments to diversify your assets and reduce the amount of risk you are exposed to.
Not sure where to start?
To determine how much you need to save or when you should start investing, book a no-obligation meeting now
Book a no-obligation meeting now
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society, as the value & income may fall as well as rise.
