6 investing tips that could make you a multimillionaire

Pension: Jordan Gillies share tips on planning and investing

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Albeit, investing in one’s younger years is ideal as the more time they have to leave their money in an investment the more it will grow. However, investing at any age is more likely to grow one’s wealth than not investing at all, so here are some simple tips and tricks to help anyone become an investment millionaire.

Create clear goals

For beginner investors the best first-step is to realise what their end goal is for their investment, whether it be to fund their retirement, save for their first house or better their financial wellbeing.

Clearly defining this goal will reveal whether an investor should look to invest passively or actively and, taking into account their current financial state, will also showcase how long they should leave their funds in an investment.

Choose investments wisely

Gold bars

Investing: by understanding the reason behind wanting to invest, one can better plan how to invest (Image: GETTY)

This is a necessity for any investor, and will differ depending on personal circumstances, risk appetite and preferences.

Research is vital to properly understanding whether a company or investment type is the right fit for an investor as well as what investment methods to use (passive, active, assisted etc).

For beginner investors, most advisors recommend starting with index funds and a diverse portfolio, in order to experience a range of investments and get a feel of what their risk appetite and investment method of choice will be.

Aim for long-term

DONT MISS: 

Longer-term investments allow an investor to spread out their risk and by re-investing any returns gathered along the way will compound the end result when the money is taken back.

This also allows investors to use smaller amounts, which for many is the only feasible way to invest, but it is recommended that investors build up an emergency fund first so that if the invested money is desperately needed they have somewhere else to turn to.

Create a tax strategy

Everyone aims to make as much money as possible when investing, but returns can be sizably downgraded if one isn’t aware of the tax implications and consequences for their investments.

Man separating coins

Reinvesting just a small amount of one’s returns can increase future returns (Image: GETTY)

An investor looking to create a large amount of wealth must first become familiar with the taxes surrounding their investments and what allowances there are for each of them.

Utilising this knowledge, such as by pulling money out once it reaches the allowances, will help optimise the amount of returns delivered directly to the investors’ pocket.

Invest at low-cost

Similarly to the tax predicament, some beginner investors looking to place large amounts of money into investments are willing to pay anyone that will offer advice or place the investment for them.

While doing this means the investor won’t have to put as much effort into researching, learning and trialling investments themselves, the costs of these commissions will also eat into their returns.

Reinvest when possible

As mentioned above, when one gets returns it is beneficial in the long-run to reinvest these, as the compounding effect will see larger returns in the future and it keeps ones’ investing portfolio strong.

However, if reinvesting isn’t possible, due to a change in financial circumstance or nearing the tax allowance limit, leaving just a small amount of the return in the investment can have a similar effect.

William Murphy

William Murphy

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