The benefits of having a healthy financial portfolio (and how to build your own in 2020)

Working to financial freedom and having a healthy portfolio, built through a web of varying assets and investments, is one of the best ways to feel secure in your everyday life, not having to worry about the stresses of money and getting things paid for. 

Here are a couple of the perks of having a healthy financial portfolio, as well as some quick steps to take if you want to look towards securing one for yourself.

The peace of mind of a financial buffer

One of the benefits of having a strong financial portfolio is that you have a great financial cushion, should any emergency payments arise that need to be sorted fast. When you have a healthy financial portfolio, you won’t have to worry about where you’ll get money to pay for your daily expenses whenever you lose a job or face other financial emergencies. A healthy financial portfolio can become your ticket to continue living comfortably regardless of how drastic the changes in your life can be. 

Also, by having a backup fund for anything that should need urgent attention, you will also feel less guilty about treating yourself with your money, and spending any disposable income that you have. Having enough money to spend on yourself without compromising your bills will allow you to live a stress-free life. This kind of life will make it easy for you to excel in different areas while taking care of your mental wellness.

After all, when you’ve spent time earning and sustaining money, you need to be able to spend it on yourself every once in a while.

The ability to pass on your investments to children

Having an investment in a piece of land, or prime piece of property, for example, is an incredible legacy investment that you and your family can work on together as a business, watching it thrive and grow as you get older. Once your children come of age, you can pass on your investments as an inheritance, as they use what they’ve learnt from you to build up the portfolio further.

By establishing a healthy financial portfolio through making investments, you’ll have peace of mind knowing that your family will still live a good life even when you’ve passed. The investments you’ll make today will also help your family attain financial stability even if one or all of their income is deducted with UK seafarers tax

Provides More Opportunity

Investing in different endeavors is common today. With the benefits one can enjoy from investing, it’s no wonder why more and more people are putting their hard-earned money into a certain investment. However, most of these people will only invest in one thing, which is one of the reasons why they’re earning potential becomes limited. Investing in one endeavor doesn’t always warrant the best returns. 

If you only invest in real estate, for example, you won’t have any other ways to earn if your rental property goes bankrupt. When this happens, you’ll end up experiencing more stress instead of earning profits. 

This is something that you can avoid if you strive to create a healthy financial portfolio. Investing in many things at the same time can maximize your earning potential and ensure that you’ll always have a backup when the first investment doesn’t go according to plan. If you invest in real estate and bonds at the same time, for example, you’ll still have a passive income if one of these investments fails. 

How to work towards establishing your own financial portfolio

Do you want to work towards establishing yourself a financial portfolio in 2020 and beyond? To get yourself started, here are some steps that you might want to think about, if you haven’t already.

Getting your finances in order – before deciding to put any capital down to build yourself up an investment portfolio, it’s probably a good idea to think about what existing financial commitments you have, and what outstanding debts you need to pay. Getting yourself free of any monetary burdens looming over your head will get your finances feeling more stable as a first step anyway, and it’ll feel better having a fresh start.

Decide which asset class is right for you – If you’re decided on investing, you’ll want to look into some of the different strategies and asset classes that might appeal to you. If interested in the property market, for example, you might want to look into some of the online guides offered by an investment company such as RWinvest to get started. Already have investments, and want to branch out? Try something either tangentially related to what you’re already experienced in, or even completely separate. Diversification of assets is a really important step, should any of your investments turn bad.
Making plans for your investment – Once you’ve decided what sort of investment strategy that you want to go with, what you can afford, and what you’re most comfortable with, you then want to draw up some plans on what you want to gain from your investment in the long term, so that you can make movements towards achieving that goal in every step you take. Creating a long term goal and sticking by it will help you to keep a level had along the way and not make rash decisions that you may end up regretting. Remember, there is always a risk involved with any investment strategy, and some markets can be more volatile than others, so do your research, and only commit when you feel comfortable. If you’re unsure of which direction to go in, seek out some professional advice.