“Saving” - tends to be for short-term
goals or when you need to get at your money quickly
There are a variety of reasons to begin saving money. Different people save for different reasons. Here are just a few reasons that you may consider saving for.
- An emergency fund - It is important to have an emergency fund set aside to cover unexpected expenses. This could cover an unexpected car repair or a sudden job loss.
- Save for a deposit on a house - Your "negotiating power" goes a lot further when you have a significant deposit.
- Save for a holiday and other “luxury” Items - You can save up for that Caribbean cruise. Additionally, you can be saving for fun “large ticket” items such as a new car or a boat.
- Education - Another good reason to begin saving money is for a child’s education, be it at a private school in the early years or for university fees in later years.
Generally, bank and building society cash accounts are the best option for this purpose (and, obviously, Cash ISA accounts are the first choice as they offer tax-free savings). However, saving for the longer term may involve the use of other types of savings plans.
“Investing” - is for the longer term. If you are willing to tie up your money and take a level of risk to get a better return - whilst balancing the risk of short term losses against the chance of possible longer-term gains.
Putting money away for the longer term usually means investing your money in schemes or funds based on the stock market and other financial assets/instruments. When investing, you take calculated risks to increase your chance of getting higher returns on your money, especially over the longer term (generally money you can afford to tie up for five to seven years or longer).
There are different types of investments and basically you take a risk with your money by investing in assets (usually on a stock market) that could rise or fall in value.
There is generally no guarantee you will make a return on your investment or even that you will get back the same amount you invested initially.
The advantage is that you often get a greater return than you would with savings, which will give you better protection against Inflation over time.
Investing your wealth is a decision that needs careful assessment of your goals and your needs.
There are a number of factors that need to be considered before an appropriate financial strategy can be created.
Callaway Sykes Associates Limited will carry out a thorough analysis of your current situation, your needs and objectives and we will also carry out an assessment of your “risk profile” using a risk- profiling questionnaire.
We will look at:
- Your current list of assets (including their tax status)
- Your investment “time horizon(s)”
- Your “appetite” for risk - or put another way, your tolerance of losses!
- Your need for capital growth versus income over time (or perhaps a mix of both)
- Your dependants / relations needs
After this analysis, we will propose a financial strategy to meet your goals.
We consider the following types of products (amongst others) which may in isolation or combination suit your circumstances.
NB We will take into account any ethical or moral issues you have with regard to your investments.
- National Savings Products – including Premium Bonds
- Bank and Building Society Savings Accounts (including Cash ISA accounts)
- Equity ISA Savings Plans
- Unit Trusts, OEICs (Open Ended Investment Companies) and Investment Trusts
- Insurance Company Investment Bonds – both “on-shore” and “off-shore” versions
Please contact us on 01245 265 881 to discuss these matters further and to arrange a full business planning strategy review.
