5 Simple Ways to Create an Investment Plan

Posted by Grace under Investing on September 29, 2015

Learn how to create an investment plan to succeed in your investing journey. It is important to create an investment plan and follow it strictly.

Want to know how to create an investment plan? There are 5 simple steps to follow when creating an investment plan, determine your financial goals & investment goals, decide how much do you want to invest, know your risk tolerance, follow asset allocation strategies and study how does each investment vehicle (stocks, mutual funds, bonds, real estate, savings account, IRAs, 401ks,) works.


Investment planning is very important to succeed in your investing journey. Investment planning shouldn’t be ignored before you decide to invest your money. If you want to succeed in investing, you should create a careful planning. But the question is, how investment planning is done and what are the things to consider when making this kind of plan. According to EconomyWatch.com, investment planning  defined as;

Investment planning focuses on identifying effective investment strategies according to an investor’s risk appetite and financial goals.” (1)

How to Create an Investment Plan?

Is investment planning same as if you’re making a plan for vacation? Is it the same as a making a house plan? Whatever you want to do in life, you need a plan. A plan is a map and a guide on what to do and how to do a specific projects. Whether you’re going to visit London, whether you’re planning to travel the world, whether you’re planning to become rich, whether you’re planning to achieve financial freedom in just few months, you need a plan to follow.

Without a plan, all are just dreams. So if you want a better results you need to create a plan and follow your plan strictly. In investing, you need to carefully make a plan because you can’t get all the money back and the time you spent.

Learn how to create an investment plan to succeed in your investing journey. It is important to create an investment plan and follow it strictly.

Image by Claire Thompson on Flickr CC 2.0

The things you need in investment planning are as follows;

  • Net Worth Statement
  • Smart Goal
  • Investment Capital

Your net worth will be your guide when making an investment plan. If you want to increase your net worth, investing is the answer. Therefore, your goal is to increase your net worth. A goal must be a SMART goal, it should be specific, measurable, attainable, realistic and timely. So ask your questions;

Questions to Answer for Investment Planning

  1. Why should I invest my money?
  2. When should I start investing money?
  3. What are my goals in investing money?
  4. Which types of investment should I choose. Is it stocks, mutual funds, bonds, real estate or business?
  5. Do I allocate my total assets properly?
  6. Do I invest according to my risk appetite?
  7. Which investment firms should I use to start investing my money?
  8. Do I need to attend seminars?
  9. Do I need help from registered investment advisor?
  10. Where to get my investment funds?

Those are some of the important questions when you are making an investment plan. Investment planning is very easy. You just need to understand the reasons why you’re investing. Investment planning is very important because it will help you what to do and what not to do to achieve your financial goal.

5 Simple Ways to Create an Investment Plan

1. Determine your financial goals & investment goals.

You have to know how much money you want to earned. When is the time you want to have that amount of money. Is it after 10 years or you plan to invest for your retirement.

Example: I want to have $10,000,000 after 20 years. I will use that money to be my retirement earning asset. A passive income during my retirement.

2. Decide how much you want to invest.

When you’re planning to invest money. Make sure you invest enough money to acquired or achieve your financial goal, a sin step 1, the financial goal is make $10,000,000. Do you think $500 investment capital per month is enough to make $10,000,000 in 10 years? So you have to analyze. Use compound interest calculator, and any financial calculator that can calculate the future worth of investment.

See example: Future Worth of $50,000 One Time Investment

3. Know your risk tolerance.

Of course if you’re still young, you can afford high risk, you should invest in different types of investments according to your risks appetite. And make sure the investment vehicle you choose can help you achieve your financial goal. If you want to know your risk profile, consult to any CFP Certified Financial Planners in your area.

4. Know asset allocation strategies.

Asset allocation can help you know how should you distribute your investments. It can also help you when and where to invest your money to minimize loses and maximize your profits.

InvestmentTotal.com already written a guide about asset allocation strategies, read the following articles before you proceed to the last step.

  • Asset Allocation by Age and Risk Tolerance
  • Asset Allocation for Investors Age 30
  • Asset Allocation Strategies for Investors Age 45

5. Know the different types of investments.

As I have mentioned awhile ago in step 3, you should know the different types of investments. How does these types of investments works. Warren Buffett, a successful investor once said;

Risk comes from not knowing what you are doing.

Therefore, you need to study everything. Don’t you worry because, InvestmentTotal.com can guide you how does each investment vehicle works.

Just simply read and study the different types of investments, and then…What next?

Take action, apply what you have learned today. Don’t create an investment plan if you don’t have to plan to invest. As simple as that.

Reference & Citations

(1) http://www.economywatch.com/investment/investment-planning.html

What can you say about this article? Did you find it useful? Let me know how do you create your own investment plan. Leave a comment and share this page with your friends.

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