Investment Portfolios

Managing investments and creating an investment portfolio
The solution to early retirement or to retiring comfortably if this is what you are looking for can be found by answering a few fundamental questions:
  • How much money has been saved?
  • How much investment income will the savings or capital produce?
  • How much income does the person who is planning to have need of in order to live happily?

Why should an individual save in the first place? There are a number of motives why individuals should save on their own, without relying completely on government or employer sponsored retirement fund plans.

  • To boost future expenditure.
  • To preserve present expenditure if earnings go down.
  • To even out expenditure over a lifetime.
  • To conserve a sound standard of living.
  • To construct a property for inheritors.

Savings have to do with distributing consumption over time and these come about from the rearrangement of present consumption in order to be able to fund upcoming expenditure. Expenditure at some point in the future will be determined on the savings one has done for the future, existing savings that have already been gathered, and the investment return on the present savings as well as those that include the effects of income tax. Savings additionally enhance future buying power but only if the real return on savings are positive. Present savings that are also known as asset reserves would consist of required savings such as pension funds as well as employer sponsored registered pension plans (RPPs). These kinds of required savings plans have an effect on the amount of intended savings, but they will in the long run supply to consumption and expenditure in the future.