Looking back, the idea of future-proofing one’s investment portfolio may not have been so popularly talked about in the finance community. There was always that notion that once you have money in the bank, you have real estate, the kids are done with school, and you have a retirement plan to cover for your sunset days, then your future is assured. Whatever happens to the investments that you’ve amassed in your lifetime now lies in the hands of those who come after you.
In essence, this notion may still be true. However, nowadays, many professionals are getting more fearful about their future. No one’s deaf to the never-ending news reports of economies crashing, financial stability in markets here and there, and inflation going up, to name a few. This sets those who’ve worked hard to have investments attached to their name wondering how they can future-proof what they’ve worked hard for. What can one do to maintain and protect your investments against future uncertainties in finance?
You can start future-proofing your investment portfolio today with these six strategies outlined below.
1. Invest In Precious Metals
Investing in precious metals isn’t the first thing that comes to mind when choosing a type of investment to go for. In recent times, however, precious metals have been earning the spotlight, both in their physical or tangible form and through soft precious metal investment forms. Some investment experts may advise you that one of the best hedges against future economic instability and uncertainty is precious metals.
Here’s why:
- It has a low barrier to entry, with precious metals or jewelry in all price ranges. Hence, you can start small with whatever price you can afford, and then slowly increase your budget once your investment threshold goes up as well. This low barrier to entry makes precious metal investments great even for those who are still starting with their investments.
- It comes with so many different investment forms to choose from. This fact makes it easier for you to find the best precious metal to invest in. Ideally, ‘the best’ should be your preferred choice and one you’ll also love to use, particularly if you’re opting for physical jewelry.
- It’s a strong store of value, mainly because of how precious metals’ value may consistently appreciate. This is what contributes the most to why investing in precious metals is a good way to future-proof your investment. Even if you start with smaller and cheaper metals and stones now, in the far future, their value will have already significantly increased so that you can earn a significant income from them after re-selling the same.
2. Diversify Now, More Than Ever
It doesn’t matter how much money you have in the bank if that’s the only place where you put all your assets in. The bank isn’t the only cash depository. As when you do, you’re missing out on other investments that may pay off higher income and interest rates than just the bank.
Now more than ever, there’s that push to diversify. Think about putting your hard-earned money in real estate, precious metals, stocks, bonds, the treasury, and many more. When you diversify, you’re protecting your investment from volatility in the future such that now the risk is decreased. Your investment risk of failure and loss is higher if they’re simply concentrated in one location. Should that nest fail, then there’s nothing else left to make up for those losses.
One of the most challenging things about diversification is learning how to start. This can be an alien process, especially for newbie investors, whose risk tolerance is also quite low. This fact shouldn’t stop you, however, from diversifying your investment portfolio. You can always tap into the financial and investment experts to help you out, so you can make the best decisions on what types of assets to invest in.
3. Keep A Cash Fund For The Rainy Days
This third tip may seem counterintuitive and may have eyebrows raising. Earlier, it’s been discussed that keeping cash in the bank isn’t the only best and safest way to future-proof your assets. While true, this doesn’t mean that you shouldn’t have cash in the bank at all. It’s still very important to save for the rainy days even if it means putting in a small amount at a time.
Having money in the bank is your best source of future security, such that anytime, you know you have the cash to pull out. While real estate and precious metals appreciate more than bank savings earn interest, you don’t earn cash yet for the former unless you sell them. If you’re pressed by time and need cash ASAP, then you’re stuck waiting for that money to come in.
It’s a traditional way of doing things, but as long as the bank you trust is a universal one with a good reputation and stability, then you don’t have to worry about the bank suddenly closing. Whatever other forms of investment you opt for, don’t turn back against the financial stability and security that bank savings provide.
4. Start Preparing For Retirement
Say, you’re reading this as a young twenty-something who has just gotten employed. You’re still about to earn your first paycheck, you’re excited about all the possible investments you’ll make, and now you’re reading advice telling you to start preparing for retirement now? It may sound absurd, but there’s no better time to start saving for retirement than now.
No one can escape old age. One day, you’re going to leave the workforce as fast as you’ve entered it, and that means those monthly paychecks will stop coming in. Sure, you may have a little pension but is that enough to support your life until death?
If you don’t save for your retirement, it doesn’t matter how much investment you have while you’re young. One day you may lose all those when you’ll need them to support your life as you retire. This isn’t the situation you should aim for your investments. You don’t place your money on assets just to support you through retirement. Rather, they’re there to give you a stable future while keeping those investments strong even long when you’re gone.
With that, saving for your retirement should start as early as when you’re still young. The earlier you start, the more you’ll have prepared for when that time comes.
5. Sign Up For Professional Guidance
Newbie in investing or not, you can’t go wrong with hiring a personal finance and investments advisor to guide you. The past years have shown that the economic uncertainties that may attack are often unprecedented. In this case, it’s safe to say that no one was prepared that even once-stable and needed jobs had to be halted, albeit temporarily, but long.
This shows that professional guidance is something everyone can use, especially when it comes to future-proofing hard-earned investments. It’s worth paying if the exchange for not doing so is losing your investments in the blink of an eye.
Financial and investment advisers spend so many years studying and learning more about the economy. They’re well-versed with economic and financial predictions, investment growth, and inflation, among other concerns.
Having that advice from an expert can give you a higher level of assurance that your investments are going to be relatively safe. Likewise, you’ll also be equipped with strategies on what to do with those investments should a predicted financial downfall in that particular market or business sector come.
When is the right time to buy stocks? When is the right time to sell? Questions like those can be ironed out, factually, by a finance and investment professional.
6. Start Side Hustles
All thanks to technology, working an 8 am to 5 pm job in the office isn’t the only way to have some inflow of cash. There are so many ways now to earn an income, and it’s up to you to harness those possibilities to your advantage.
For those who have made that switch to working from home, then take advantage of how you can easily start side hustles. Passive income, for example, is a well-loved means to future-proof your current investments. With passive income, you can earn money without necessarily doing anything more physically. Even as you sit, you have income coming in, like through rentals, for example.
Those side hustles can help future-proof your current investments just in case you lose your current job. If that happens, then your investment income can still be kept intact as you have money coming in from your passive income or side hustle to cover your living expenses. If not, then once you start taking money from your investments when you’re jobless, you may dangerously lose those investments, one asset at a time. No matter how small, those side hustles can make a huge difference to financial security.
Final Thoughts
Financial advisors would surely tell you about the fact that no one can really predict the tidal waves that may hit the economy in the future. No one can tell, too, what happens to them even as early as tomorrow. These two facts should be more than reason enough to think about how to protect one’s investments in the future. It’s not always about earning the most profits from your investments if the risk of losing them due to economic turmoil is also high. As a takeaway from the strategies above, it’s just as important as well to secure your investments’ stability, all while earning the best profit possible from it.
