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How to Make an Investment Plan for Optimum Results


If you’re creating a sustainable investment plan for the future, you’ll want to make sure that you have all the information you need to make it a success. Read on for our guidance…

You may be at a point in your life where you’re looking to make sustainable preparations for the future. For many, making an investment plan is one of the best ways of achieving this.

If you’re aren’t already in the know, you might be wondering what an investment plan is, and how you would go about making one. Afterall, it can seem a little daunting if you’ve had no prior experience with business or financial planning.

There are plenty of things you will need to consider if you’re to make your investment plan a success, whether that be nailing down exactly what your goals are, or putting Cayman-based investment funds aside. So, to find out more about getting it right, you came to the right place…

What Is an Investment Plan?

In essence, an investment plan refers to all of the investment items and related costs that are associated with a particular business investment. They encompass the expenses incurred as one-off costs related to the investment, as well as during the start-up phase.

In business practice, an investment plan tends to be drawn up whenever an investment decision related to the business needs to be made. This could be for a number of reasons, including:

  • Initial investment: referring to the procurement of all required assets in connection with the business.
  • Replacement investment: where an asset of the business is replaced with another asset.
  • Rationalisation investment: investments that will result in a cost saving.
  • Expansion investment: if the expansion of the business necessitates the need for a procurement of assets.

An investment plan should not only form the basis for the business plan, but also a guideline for financing. Generally speaking, if you need a loan to make your investment, a capital provider, such as a bank, is only likely to do so if you provide a full and thorough plan. So, their importance should not be underestimated!

How Do You Make an Investment Plan?

If you know what you’re doing, making a plan for your investment can be a straightforward process. However, if you’re a novice, there are a number of steps you’ll want to follow to make sure that it’s a success…


  • Assess Your Current Financial Situation


Before you go any further, you will need to take stock of your finances and how they will be used. You’ll need to figure out how much you will realistically be able to invest, and whether you will need to apply for a loan in order to make a decent return on your investment. Creating a simple spreadsheet that outlines your monthly disposable income after expenses is a great way of doing this.

You will also want to consider what type of investment you will be making and how accessible it will be. Are you planning to invest in something that can be easily cashed in on like stocks, or something more complex like real estate? These are the sorts of questions you’ll want to be asking yourself.


  • Define Exactly What You Want to Get Out of Your Investment


Whenever you make any investment plan, you’ll need to have a clear idea about what you want to achieve. Take some time to consider why you’re investing in a business and what you want to get out of the journey.

It’s a good idea to set short-term and long-term goals that map out where you want to be at different stages. What will your investment look like in a year? 5 years? Longer? By setting out these goals, you’ll be able to plan an investment path that suits your individual needs.

You should also be wary of investment plan templates for this reason, as you’ll need to make sure the plan is as personal as possible.


  • Decide on Where You Want to Invest


Deciding where you want to make an investment is another huge decision you’ll need to make when you are creating an investment plan

As an example, if you’re planning an offshore investment, then you might want to consider locations like the Cayman Islands. They house a huge percentage of offshore hedge funds because of their favourable legislations. Worth keeping in mind, right?


  • Carry Out a Risk Assessment


Investing can be risky and, unfortunately, there no guarantees that everything will be plain sailing. That’s why carrying out a risk assessment and predicting how you are likely to respond in certain scenarios is key.

By completing a detailed risk assessment, you’ll hopefully be reducing the chances of losing out on your investment, achieving optimum results in difficult circumstances.


  • Consult a Financial Adviser


Whenever you make a financial decision as substantial as an investment, you’ll want to consult an expert financial advisor for their advice and guidance.

This is especially important if you’re an investment plan novice, as there are likely to be one or two details that you will need clarifying, or some elements of the plan itself that require tweaking. Two sets of eyes are better than one.

What Should You Include in an Investment Plan?

Now you have a better idea about how to make an investment plan, you’ll be wondering what needs to be included. Well, wonder no more – here are some of the most important elements that make up any successful investment plan:

Your Goals

As mentioned in the previous section, defining your goals is one of the key steps when you are planning your investment. So, don’t forget to include them when it comes to writing your plan!

If you have in writing what your aims and intentions are, it will provide context to the plan as a whole, and support your financial proposals. Remember, you want to make everything as clear and transparent as possible.

A Full Financial Breakdown

Make everything as concise as possible when it comes to finances. Include a breakdown of your financial situation, the funds you are planning to invest, and the type of asset you intend to invest in.

Don’t kid yourself either. Including a best-case scenario or hypothetical financial figures is no use to you, even if you think things might get a little tight. Keep those figures in check.

A Realistic Timeline

Any good investment plan will include a realistic timeline, mapping out when you intend to start investing and when you’re likely to achieve your goals. This can be done by taking a closer look at both your financial situation and the goals you set out, helping you to define how much money it will take to get to different stages.

An Investment Policy Statement

If you’re working with a financial advisor, then it’s good practice to include an investment policy statement. This will outline all of the rules you want your advisor to follow, describe your strategies and any risks you’re willing to take. 

An investment policy statement will also describe how your investment will be monitored and what actions need to be taken in specific scenarios.

Are You Making an Investment Plan?

There you have it! Hopefully this has given you a closer insight into investment plans and the ways in which you can make yours a success.

Are you currently writing an investment plan? Or have you written one in the past? Feel free to leave any nuggets of wisdom you have in the comments.

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