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6 Steps To Create Your Best Investment Plan

best investment plan

You can increase your chances of achieving your goal by 60 to 80% by just writing it down on paper. Therefore making the best investment plan is essential for success in your financial freedom.

An investment plan is your investment viewpoint and your common sense on investing to reach your goals.

You’re going to look at 6 steps to create your best investment plan to exactly reach where you want.

1. Investment viewpoint

Determine what your risk tolerance is moderate, low, or high. It is important to know investors how much risk they can take thereby they can make investments accordingly.

Low risk-In this category people are risk aversive, which means they avoid taking a risk.

Their only motive is to invest money in securities where risk is low. Usually, most investors in this category invest in a fixed rate of return securities in which the risk to lose money is very low.

High risk-They usually are traders who trade daily to make a capital gain on their investment. They must be emotionally and financially able to weather substantial short-term losses.

Moderate risk- is Investors who are willing to accept some risk to make a capital gain on their investment. They reduce risk by investing in undervalued companies, diversifying portfolios, using the dollar-cost averaging style, etc.

2. Investment goals

When you have reason to invest, you can make appropriate decisions for your investments. Such as if your goal is to invest for your retirement, then you can decide which is the best asset to invest in and for what time horizon.

4 reasons people invest their money;

  1. Passive income by investing in dividend-paying stocks, real estate through renting a property and long-term bond by getting interested annually or semi-annually
  2. To gain wealth
  3. To achieve financial goals, such as buying a car and for the education of your children
  4. Saving for retirement

3. Amount to invest

Consider your amount to invest in your investment goals. Suppose you can invest 30% of your income, then 10-15% for retirement, 5-8% for a car down payment, and so on.

4. Types of investment

Always choose an investment based on your goal and risk tolerance. Invest in stocks if your risk is moderate. Invest in real estate when you want passive income.

These are some investments you can start:

  • Stocks
  • Bonds
  • Exchange-traded fund
  • Mutual fund
  • Real estate

5. Your risk factor

Let’s understand with these 3 examples:

  • You need money to buy a car in 2-3 years, so your investment should not be risky
  • Investing for retirement, moderate risk
  • You can lose somewhat money for short-term profit, high risk

6. Action to take

The plan is a waste until you don’t act on it. After following through all 5 steps, get into action open your Demat account for buying stocks and ETF, fill your employment plan if you are in a job, keep connected with a real estate broker to get information about properties for buying, and so on.


Determine your risk tolerance, reason to invest, how much amount to invest, in which assets, you risk factor and take action to reach your investments goals. After all, review your portfolio semi-annually or annually to check what you expected is happening or not.


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