How Can You Position Your Investments to Provide for Your Income Need

In the world of investing, you’ll encounter opportunities for both value and growth. The ability to identify the best opportunities at the right time is what makes an investor truly successful.

Investing in long-term prospects that return manifold over time is understandable. However, when investing during your retirement years, it’s essential to ensure that your investments generate short-term income.

At Brogan Financial, we guide investors in determining which investments match their financial objectives and risk tolerance.

So, let us help you in –

• Crafting a well-thought-out investment portfolio that can achieve various financial objectives—be it during your retirement years or earlier.

How to Position Your Investments to Meet Your Income Requirements

With the potential for high inflation or economic uncertainty looming, ensuring your portfolio provides a reliable income stream is more critical than ever. By taking a strategic approach, you can navigate the evolving financial landscape and achieve the peace of mind that comes with knowing you’ll have the income you need to live comfortably.

Here are the steps you need to take:

Determine Your Financial Needs

Financial needs are the fundamental expenses required for you to maintain your lifestyle and professional obligations. These regular expenditures, such as rent, mortgage payments, or car insurance, tend to consume a significant portion of your income.

By measuring your income needs, you can figure out the precise amount you need to generate through your investments. An experienced wealth management firm can help you estimate a target amount.

Diversify Your Assets

Constructing a diversified investment portfolio is essential for effectively managing risk and maximizing long-term returns. Allocate your investments across various asset classes to mitigate risk. That said, avoid making random investments. Ensure that each investment decision is backed by a sound plan.

Allocate Your Funds in Line with Your Individual Risk Profile

Younger investors often exhibit a greater appetite for risk.

According to a 2021 survey from CNBC Select and Dynata, 61% of investors aged 18-34 were inclined to take risks in the market, compared to just 16% of investors aged 65 and above.

Since each asset class carries its own set of risks, it’s important to allocate your funds thoughtfully. Stocks, bonds, cash, and alternatives like real estate and commodities all have varying levels of risk, and they are often not correlated.  Consequently, when one asset class is way down, others may be up or at least flat.  Greater diversification may provide a more stable return over time. 

Prioritize Income Generating Assets

Consider incorporating income-generating assets into your portfolio. Here are some powerful options:

• Dividend-paying stocks: Own a slice of profitable companies that reward you with regular payouts.
• Bonds: Lend money and earn predictable interest income.
• Rental properties: Collect rent from tenants and build long-term wealth.

Remember, the key is to balance yield and growth potential to match your income goals. Don’t just chase the highest payouts; consider how each asset contributes to your overall financial plan. Talk to a financial advisor to craft a personalized strategy and maximize your income potential.

Consider Making International Investments

The USA draws the highest investment from foreign sources, but more US investors should consider expanding into foreign markets as well. Spreading investments internationally reduces risk exposure to specific economies and broadens the scope of your portfolio.

Incorporating international investments could enhance your portfolio’s risk-adjusted returns. Furthermore, it could serve as a buffer against currency fluctuations, shielding your investments from the depreciation of your home currency.

Make Regular Assessments

Keep a regular check on your investment portfolio to make sure it still matches your income requirements, risk tolerance, and financial goals. Changes in the market, economy, or your situation may call for adjustments to your investment strategy. You might need to make sales and purchases to realign your portfolio with your financial objectives.

Work with Us

Achieving financial goals through investing can be intricate. So, seeking advice from financial advisors or wealth managers tailored to your circumstances is a smart move.

We here at Brogan Financial are ready to guide you in creating a comprehensive investment plan and implementing suitable strategies, which will help you adeptly handle market fluctuations.

Call us today to set up an appointment and allow us to help you create a portfolio designed to tackle the challenges of the modern economy.

And be sure to listen to ‘More Living with Jim Brogan‘ on 98.7 FM WOKI every Saturday at 9 a.m. for more financial insights and talks!