What should be included in investment checklists?
Investment checklists can vary with what is included on the checklist. These are some of the priorities that everyone should consider when looking at investments.
This post is about investment checklists.
Let’s dive into the top 5 priorities on investment checklists.
1. Financial Goals
To start, before you consider investments, you need to define your financial goals. What phase of life are you currently in and preparing for? Buying a car/property, helping kids out with college, preparing for retirement, genuinely curious in growing your wealth?
Deciding what your financial goals are are important in the investment checklist, because it’ll help determine how many of your eggs to put into short term vs long term investments.
2. Risk Assessment
Once again, defining your financial goals will ultimately help with determining your asset allocation. That plays into your risk assessment. You’ll want to assess your risk tolerance, making sure that it aligns with your investment goals.
3. Research
Research, research, research. This goes without saying, but it is important to always do your research and due diligence prior to investing. Some things gain a lot of hype, but it’s important not to get too sucked into the hype.
4. Liquidity Level
When investing in anything, one of the factors to keep in mind is an exit strategy. So, how liquid is an investment? How easy it is to access your funds in your investment in the case you need it?
5. Tax Implications
Taxes are one of the top expenses, second to purchasing a property. That’s why tax implications are a priority when it comes to figuring out what to invest in and how to invest. It’s important to plan accordingly. This is why tax advantaged accounts (401k, Roth IRA, HSA, etc) are heavily discussed.
To reiterate, the top 5 priorities on investment checklists are:
- Financial Goals
- Risk Assessment
- Research
- Liquidity Level
- Tax Implications
There you have it! Interested in learning more investment options? Check this post out for stocks vs bonds.
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