Asked on 13 Oct 2019
How should they be prioritised?
Hi anon, there are many options actually. If you have prepared your coverage and your emergency funds, you can start to look at the various asset classes to consider their pros and cons.
Determine your own preference and risk appetite, and then decide what would suit you. A person adverse to risk might want to reduce or eliminate stocks completely, a person willing and able to take risk may skew the portfolio heavily in favour of stocks.
What is important is to build a multi-asset portfolio with the flexibility to shift your allocation across the various asset classes in tandem with your evolving finances, age profile, risk appetites and lifestyle. Allocate your monies accordingly, add on regularly to your portfolio, and remember to monitor and rebalance. Prepare a warchest for market opportunities, and always stay focused. Grow your human capital as well so that you can have more funds to invest.
As much as I would love to give a more detailed answer, your question is a little too general, but I hope the pointers will set you in the right direction.
Pay yourself first, and buy financial assets that provide you with a higher expected return than the current inflation rate.
I suggest making sure you have 6 months of expenses set aside for emergencies, and then save a minimum of 20% of whatever you earn for retirement.
Build a globally diversified portfolio with an asset mix that suits your risk profile, and invest regularly, rebalance yearly, and stay invested no matter what financial headlines may say.
Investing is all about discipline, and asset allocation.
14 Oct 2019
There are plenty of options to save and invest. Most importantly it comes down to your risk profile, current income level and your desired end goal.
Many people have an 'idea' for retirement, but in actual fact you should set a concrete goal that can get you started. For example:
1) I want to build a monthly cash flow of $100.
2) I want to boost the monthly cash flow to $500.
3) I want to have my passive income covering my monthly expenses.
From there, you can reverse engineer to your required rate of return and decide which investment tools are suitable for you. There are plenty of them:
Value investing, ETF Investing, etc.
End of the day: Remember to pay yourself first by saving before spending every month and deploy your savings meaningfully
There are a lot of investment options available to prepare for your retirement. However, the plan you should implement is subjective to your investment objectives and risk appetite. The first priority should be to create an emergency fund, containing 4-6 months of expenses. With the excess amount, you can start investing and preparing for the future.
I work at Kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.
Get yourself protected through insurance first. Hospital plan, Death and Early Critical Illness.
Save at least 10% of your income to start building wealth.
When you have at least 6-12 months worth of emergency funds start to channel the rest of the funds into investments with higher return
If you are new, start with ETF, Funds or Robo.
When you built up sufficient knowledge and find a great opportunity, invest it into stocks.
This is my opinion on how one should structure their basic retirement planning.