3 Ways to Improve Your Financial Portfolio - Our Guide
Budding investors know that to get ahead in this dog-eat-dog marketplace, building a diverse investment portfolio is critical to success. It acts as a basket of assets that allow investors to stay on top of their stocks, bonds, and cash, making it easier to spread capital across multiple classes.
Not only does a diversified portfolio protect your investments, but asset allocation can also position your portfolio in a lucrative market as it opens up far-reaching opportunities to earn higher profits.
Of course, for people who want to achieve financial security outside of their professional finances, it also pays to look into your private investments if you want to build a compelling financial portfolio.
Tip #1: Make an Outline of All Your Assets
The first step to constructing a solid financial portfolio is to list everything you own. This includes investments in cars, stocks, bonds, mutual funds, cash, real estate, bank accounts, along with the type of debt you owe from student loans, card balances, mortgages, and more.
Don’t leave out any details since the primary purpose of creating a financial portfolio is to provide a clear overview of your financial status, so every amount counts to complete the bigger picture.
Tip #2: Add to Your 401k
It’s easy to think that skipping out on your 401k contribution is acceptable, especially when you’re in a financial bind. However, it’s more beneficial to your financial stability if you pay attention to your retirement plan even if you’re dealing with a pile of debt one after another.
Keep in mind that this step is critical only if your employer matches the contributions to your 401k accounts, so feel free to skip this if your employer fails to match your contributions.
Tip #3: Pay Off High-Interest Credit Card Debts
Dealing with a mountain of debt can be financially restricting in more ways than one, so the next best course of action to develop a reliable portfolio is to plan on how to pay off high-interest credit card debts.
It makes sense to prioritize your debts according to their interest rate, so jot down all your debts and rank them accordingly. Consider how much you can allocate for debt pay-downs and pause on making contributions, with the exception of your 401k match.
The Bottom Line: Building the Value of Your Investment Portfolio
Everyone strives to achieve financial wellness in life, but living from paycheck to paycheck can make it a tricky resolution for most people. Building a financial portfolio can help put you on the right path, particularly since it ensures you keep track of the comings and goings of your cash.
The tips above are just some of the first steps you can take to set yourself up for a financially secure future.
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