Another Golden Rule for Investing: No Plan is Set in Stone
If you want to invest money you need to have an investment plan. This much is certain, but you also need to know the limitations of that plan. For example you should know the circumstances that led you to create that plan to begin with. And you should also know what type of circumstances could lead you to revisit that plan with the intention of altering it in some way.
Life gets in the way
Here is an example of what I mean by this. You might have an investment plan that has been created with the intention of letting you retire early. This is all well and good, but supposing you lost your job? What would you do then? You may well have to revisit your plans to see whether they are still valid in light of such a major change to your circumstances. Your idea of early retirement may have to be shelved; alternatively you may be able to put your investments on hold rather than cancelling them and opting for something else instead.
The point of all this is that your investments can work wonderfully for you in some situations. But if those situations change the investments may have to change as well. It is wise to be alert to this fact when you set the investments up in the first place.
Looking for a get out clause
Most people realize the longer they can tie their money up for, the more they are likely to earn from it as a result. But with that said, it is also the case that circumstances could lead you to cancel an investment you were previously very keen on. If you suddenly needed access to more cash because you had lost your job for example, it would be very frustrating to know you had the cash you wanted but couldn’t get to it.
So whenever you think of investing in something new – whether it be property, stocks, shares or any other investment plans – make sure you know what you can do if you needed to get your hands on the cash in a hurry. Is it possible to cancel an investment without getting penalized for doing so? If you are penalized how much will it cost you? Hopefully you won’t need to cancel anything, but it is wise to find out what you can do just in case the time should come.
Revising your plan
If you should need to revise any investment plans you already have, don’t make any kneejerk reactions. Take some time to consider all the options – you may not have to make any adjustments at all. The last thing you want to do is to panic, cancel an investment and then find out later on you needn’t have done it at all. A little time and a level head are the two best things you can have on your side at this point so always bear that in mind.