Let's Focus on Reaching Your Financial Goals Together

Saving for the future is easier than you think. A little can go a long way, and with a little help, we can all organise our finances to meet long-term needs and goals.


Here are our top six tips to getting ahead financially this year: 

1. Start sooner than later

One of the top things we hear from those over 50, is that they wish they had started saving earlier.

When you are young, it is less about the amount, and more about developing the habit of saving. Start by putting aside a set amount – say just $50 – into a savings account each month. That is what I did. Setting up a standing order helps, so you don’t have to think about it each month.

Starting early is also important because it compounds interest. Think of a snowball rolling downhill. As it gets nearer to the bottom it starts to grow, quickly. If you want a big snowball, you will look for the biggest hill. Starting early is synonymous with starting on a big hill.

If you have not started early, don’t worry. Whilst the young surely benefit, this is good advice for all. It’s not too late to start now. While your pension will certainly make up a portion of your retirement plan, please do not make the mistake of assuming that it will be sufficient to fund your retirement.

2. Have a plan 

You have started saving – great! Now it’s time to develop a plan. A savings account is fine, but as your savings grow, you might want to consider higher growth strategies, such as equities. Your plan might be as simple as “I am putting aside $50 a month and when I reach $1,000, I will invest in the stock market”. This is where many hit a roadblock. But investing in stocks does not have to be complicated. There are plenty of resources to help you develop a plan that meets your needs.

Think about:
1) how long you intend to invest
2) the intended purpose of your investment
3) your tolerance to risk.

Having a plan will hopefully prevent spur of the moment decisions or emotional reactions when the inevitable declines occur. It is also a lot easier to say ‘no’ to spontaneous spending when you can see your money growing.

3. Learn from your mistakes

Making mistakes is part of the process and it is not a problem unless we stop saving. Whether you are an active trader or prefer passive investing, you need to learn what works best for you. This is another advantage of starting early. The lessons will be frequent and the impact of a mistake less severe.
Common misconceptions about investing are that you cannot take risks or you cannot take several risks at the same time. Being uncomfortable with risk and not having a plan are the principle reason why many retail investors buy high and sell low. Do not let this happen to you.

4. It's about you 

Investments are like a well-tailored clothes. They look better when they’ve been adjusted to fit you. Do not worry about what other people are doing or what investments you think are popular. Think about your own circumstances and your own goals, which may be completely different from those of your neighbour or colleague. You may be more averse to risk or have specific goals, such a saving for a holiday, a down-payment on a house or a wedding.

To determine an investment strategy that is suited to your financial needs, take Argus’ online Investment Questionnaire. You can also use the online calculators (located under the Argus Online Tools tab) to help with your planning.

5. Know what you are invested in

Understanding your investment is critical. Whether you have a simple strategy that includes just an index fund, or a more complex strategy of individual equities, for each position in your portfolio you should always be able to answer two questions: what am I invested in and why am I invested in it? These questions compel you to understand the risk and nature of the investment. Is it a core stock fund for growth, a fixed income fund for income or risk reduction, or an opportunistic investment higher return? Each position has a role to play and must complement the other holdings.


6. Think local

Owning shares in Bermuda companies is a great way to start a savings plan and to learn about investing. The benefits are that you already know the companies very well, they can provide attractive returns and investing in Bermuda shares is inexpensive. Learn more about investing on the Bermuda Stock Exchange here.

Alternatively, Argus Wealth Management can provide access to a range of options to assist you with meeting your long-term goals. Find out how your investment objectives can be met with our range of investment solutions here.

Joel P. Schaefer is a chartered financial analyst and Senior Vice President of Argus Wealth Management Limited.

DISCLAIMER: The content in this article is for informational purposes only and is not intended to be a substitute for professional medical advice, diagnosis or treatment.