Monday, August 4, 2008

Asset Building

Successful asset building is based on building up diversified investments over a prolonged and gradual period of time. Putting all your money into one asset class, in one market (think Irish Property), is not the foundation on which to build your investment portfolio.

It is very difficult to convince someone early in their working life that what they need are investments that include diversified, lifelong strategies that cover domestic and international money markets. It is my opinion that this is the correct course to take.

If you understand the message that Aesop's fable of 'The Hare and the Tortoise’ conjures, then you will have a distinct advantage over those that bite off more than they can chew. That message is 'Slow but Steady Wins the Race'.

Everyone should give themselves time to build their assets and not be looking for the 'quick buck' or the immediate gratification that a risky proposition might bring.

Consumers should try and build up short-term savings and/or invest in low-cost medium to long term funds. It gives them more options, when and if, they decide to purchase a property and allows them the scope to handle the uncertainty that unexpected financial events may bring.

100% mortgages are no longer available. Hopefully the banking fraternity and their regulatory masters will learn from the errors of this lending policy.

If house purchase is a financial goal you are going to have to get the deposit from somewhere. A mortgage applicant with a history of saving/investing on a regular basis will stand a better chance of gaining approval, in my opinion.

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