Make your money work harder for you.

After putting time and effort into setting money aside, you will want your savings to do more than sit still. You will want them to work as hard as you do. In this article we outline some practical steps to help you strengthen your financial foundations, grow your wealth, and stay on track towards your long term goals.

Build a solid foundation

Start with security. A rule of thumb is to save between three and six months of your salary in an easy-access deposit account to create an emergency fund or “rainy day” money. This helps you feel secure during unexpected situations, including home repairs, medical emergencies, and job loss or change.

Look for accounts with high interest rates and distribute your money across different financial providers to stay protected by the Financial Services Compensation Scheme (FSCS). You can consider combining instant access accounts with higher interest notice accounts that require 30 or 90 days’ notice. However, think about how quickly you might need to access the money, and any early access penalties they might have.

Diversify your portfolio

It’s usually advisable not to put all your savings into one area. Instead of focusing solely on the stock market, you could explore a range of asset classes such as property, gilts or corporate bonds. Spreading your investments helps protect you from downturns in any single area and can provide steadier long-term growth.

Avoid market hype

The basic principle of “buy low sell high” proves difficult to execute when it comes to market timing. The practice of following market trends during peak investor interest makes you vulnerable to market crashes. Market downturns can present potential investment opportunities instead of warning signs to investors, but you need to carefully choose your investments.

An alternative to selecting specific shares is to use unit trusts or open-ended investment companies (OEICs). These are professionally managed collective investments that pool capital from multiple investors and are often highly diversified.

Save regularly

The ability to benefit from market movements does not require you to forecast peaks and troughs. For example, a monthly ISA savings plan allows you to benefit from “pound cost averaging” which helps you invest at different market prices. Your investment in units will decrease when prices rise and increase when prices fall. This results in lower average costs over time.

Think long term

Equities usually prove superior to other investment types when viewed across extended timeframes, but investors need to maintain patience. You should think in terms of years to balance out market fluctuations while keeping your focus on achieving your long-term objectives. Short-term market fluctuations will cause discomfort, but your investments will stay true to your future goals when properly structured.

Get started

The process of maximising your financial resources requires both planning and discipline, together with professional guidance.

Our experienced team can help you create the perfect investment strategy.

Call us on 01603 789966 or send an email to [email protected].