What is planned investment? If you want to transition into a financially secure retirement life, knowing about it is very important. Moreover, a planned investment is your key to your ideal lifestyle. After all, it involves strategic investments and leads to maximized returns. What to know more about it? You’ve come to the right place! Keep reading for everything you should know about planned investment and how it can help you build the life you want to lead.
What is Planned Investment and How it Works
A simple answer to the question – what is planned investment? – is that it’s a strategic approach to help you achieve your investment goals. Furthermore, to be more specific, it is a method of strategically allocating resources to achieve financial growth and stability. Moreover, planned investment or intended investment refers to the one that you plan to make during a specific period of time.
“Planned investment is the one that firms, individuals, or public bodies intend to make during some period of time.” – Oxford Reference
Furthermore, planned investments can be used for various reasons. Whether a business looking to expand operations or an individual aiming to grow their wealth, it is beneficial in all cases. Most importantly, it revolves around specific goals. Unlike unplanned investments, the execution of planned investments is based on your specific financial objectives. Besides, it lets you invest in multiple streams including real estate, stocks, bonds, mutual funds, alternatives, etc.
- Real Estate
- Stocks
- Inventory
- Bonds
- Mutual Funds
- Alternatives
How Planned Investment Works
Now you have a clear answer to: what is planned investment? What’s next? You should know how it works. This process begins with setting clear objectives that revolve around your:
- Growth
- Income
- Capital preservation
Next, you have to conduct thorough research to identify the best investment opportunities – that lead to maximized return. Moreover, you also have to evaluate potential risks and returns, market conditions, and economic trends while devising an investment strategy. Think you can do it alone? Well, you can but It’s going to be overwhelming. So, it’s always better to hire a professional investment planning consultant.
Note: Continuous Monitoring is Important!
Your investment goals may evolve over time. And to make sure your investment strategy keeps up with it, you have to continuously monitor it. Furthermore, you should make periodic adjustments to make sure that your investment strategy aligns with your goals.
What are the Benefits of Planned Investment?
You know what is planned investment but do you know what perks it has? As aforementioned, the goal of planned investment is your financial growth and stability. You can say that it is your guiding light toward achieving your ideal life in terms of money. But how does it do it? Well, to make it clear to you, here are some benefits you can avail of during your planned investment:
Increased Income
Planned investment can increase your income to a great extent as it lets you generate returns through various streams. In other words, a planned investment can fund the lifestyle you want to build. Yes, that’s true! The main – most obvious – perk of it is that it maximizes your wealth. But many of you ignore its long-term benefit: a peaceful retirement. Besides, it allows you to invest in multiple streams that diversify risk and enhance returns.
Risk Management
A planned investment helps you manage and minimize risks in the most efficient way. After all, it allows you to diversify your investment portfolio. And a diversified portfolio means spreading your risk across multiple streams. In other words, dividing your investment across various streams will reduce the Impact of any single investment’s poor performance.
“A diversified portfolio helps your overall investments to absorb the shocks of any financial disruption. Hence, it provides the best balance for your saving plan.” – Forbes Advisor
Other than this, a well-planned strategy involves assessing:
- market conditions
- economic trends
- potential risks
This makes sure that your investments will take you toward your set goal with as less hurdles along the way as possible. Again, you should continuously monitor it to make sure your investment is a risk-free one.
Increased Tax Efficiency
You now know what is planned investment. But do you know how much it helps you with taxes? By strategically managing your portfolio, you can minimize your tax liabilities. Interesting, right? What’s even more interesting is that it can maximize your tax efficiency. After all, a well-rounded planned investment is devised with tax efficiency in mind. This means you can retain more of your returns and boost your overall financial growth.
Provides Financial Security
This is the main goal and the major benefit of planned investment. As aforementioned, it helps you strategically invest across multiple streams. Moreover, such type of investments help you generate consistent income from these streams. Plus, it also helps you balance risk and handle taxes. Hence, planned investment leads to financial security. If you are planning for retirement, you need to have a well-planned investment strategy. After all, you can’t just live on retirement savings – they will exhaust one day.
How to Make the Most of your Planned Investment
You have a clear idea of what is planned investment and you know how to do it. But can you do it alone? Well, you can but it will only leave you overwhelmed with no efficient results. So, what should you do? How to maximize the benefits of your planned investment. Well, it’s simple: hire an investment planning consultant. It is because they know how to navigate the complexities of the investment landscape. Plus, they are always ready to provide you with well-balanced, unbiased, and insightful advice.
Adham is a student of Masters at the University of Birmingham. He loves writing about business, finance, technology, and life. He believes that sharing knowledge with the public is the best thing that one can do for the world and humanity.
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