As any financial advisor will point out, the sooner you start saving and investing, the better off youll be in the long run. Disciplined savings habits are an important first step in meeting any of your financial goals. Once you begin saving on a regular basis, youll have to decide how to invest the money you are saving and assess your need for growth or income.
Although everyones attitude toward money and investing is different, most investors share some common situations throughout their lives, and there are some basic rules that apply to most investors. First, no matter what your life stage, youll probably always want to have some funds set aside in a liquid cash reserve to provide liquidity for emergencies. Second, if you can tolerate even a little risk, you may want to have some portion of your portfolio in stocks to help protect your savings from being devalued due to inflation. Another good idea is to stay up to date on your holdings and investment strategy through annual reviews. Finally, every investment decision should include tax considerations.
Regardless of what financial stage of life you are in, you will have to decide what your needs are and how comfortable you are with risk. A financial advisor can help you match your risk tolerance, time horizon, and individual goals with an appropriate asset allocation strategy.