When planning to downsize your life you must plan your finances carefully not just for the present but for the years ahead when you will be less able to work and increase your financial stability. For anyone who either invests in stocks and shares or intends to take this route to save money they must be confident that they are doing the right thing as we are often told that investments can go up and down leaving the prospect of a downsized life very daunting.
Performance
If the stock market performs well your investments will grow rapidly but it takes a brave person to rely solely on this form of investment if it is their only savings after they have downsized their life. Speak to as many advisors as possible before investing you money in stocks and share.
Your bank and a personal financial advisor will be able to tell you the best way to invest at the time you are ready to do so. Time should be taken with your financial planning as it could be the difference between downsizing your life, paying off your mortgage and enjoying your life earlier rather than working until you are seventy.
Planning For The Future
If it is your intention to downsize your life in a few years time you will need to look to your investments now. Will they perform well enough to enable you to use the funds to pay off your mortgage early rather than hang onto them and hope they produce good dividends. If you are intending to put more money into stocks and shares hoping that they increase enough to pay off your mortgage you may well think instead of using the money now to clear your mortgage debt.
Interest Rates
With interest rates starting to increase it could be prudent to lower the capital sum you have borrowed. Trading on the stock market is fine if you are prepared to lose your money but with the right advice you can still invest and make a profit. Saving in ISA's for your future may be a better plan that putting your money straight into stocks and shares. Look to see what your bank is offering as there are many ISA options available. If you feel you will need to access your money do not tie it all up in the same place but leave some in an accessible account.
The Economy
We hear all the time about the possibility of a recession. Interest rates are rising. If you have credit cards and other debts look to muse your savings to clear these now as any debts are going to increase as interest rates rise. By having as few debts as possible as you approach downsizing your life you can dabble with stocks, shares and investments in the safe knowledge that your lifestyle will not be affected. Careful financial planning will see you enjoy your later years without worry or the need to carry on working to support your lifestyle.
