« »

Wednesday, February 2, 2011

Family investing tips

Family investing tips
When it comes to family, investment is includes more than just money. Family investing also involves anything intended to benefit a family's well being over time. Such investments add value to family life, family quality of living, and standard of living. In order to invest in family and/or for family one can benefit from considering how one invests, in addition to what and where one invests to maximize return on investment. This pertains to monetary and non-monetary investments.

Choosing an investment

If one tries to invest too much or too little, one could burn out, run out of resources, not put enough into a family etc. For example, putting too much money into a 529 college savings plan may limit the growth opportunity afforded by less savings orientated asset allocations. In such case, at an early age financial instruments such individual retirement accounts and life insurance policies can be low cost and have long term benefits for parents and children.

In terms of non-monetary investments, choosing an investment one is able to reasonably make with a little more than what one usually does is a good place to start. For example, if one is a loving person, love is then an asset that is in good supply. The extra love one has can be reinvested in family to help them learn about love and grow love of their own. The same and similar principles hold true for other investment categories. Of course love alone does not necessarily make the world go around.

Be willing to lose on the investment

Not all investments succeed or make money, this is a fact one should be fully aware of before investing anything whether it be time, money, energy, goodwill etc. Knowing how to deal with a negative investment and what to do when an investment goes down in value is just as important as any other part of investing.

Risk management is thus an important aspect of managing family investing i.e. not betting the farm on a high risk investment is generally a good idea. In terms of love, if one's love is continually invested over time with absolutely no return the investment may still not be a loss because 1) Love is free, and 2) Love can take years for the value of love to be realized. In such cases adjusting one's investment plan to include tough love may be helpful.

Use an investment strategy

All good investors use tactics and strategies of one kind or another. The importance of strategy is highlighted by changes in market and economic conditions over time. As the financial landscape changes, it can be helpful if family investments change along with it to adapt to the new financial circumstances. This can help optimize investment performance.

The big family investments

Often, the largest investments people make are the one's that deplete one's own resources the most. These investments are potentially the biggest sacrifices especially if they don't return a positive yield. Some of largest non-monetary investments family members and parents make include time, money and energy. These are investments because they can help a child grow with experience, knowledge and wisdom that parents offer them.

Other non-monetary family investments

Time, money and energy wouldn't be complete without refining how they are allocated. For example, one could invest a lot of time doing nothing with a family member but that wouldn't exactly be productive other than in terms of companionship. Optimizing time, money and energy involves fine tuning the big investments into smaller investments. Some of these smaller investments include understanding, effort and love.

Family investing is more than just a monetary investment plan as family is about learning, growing, experiencing, becoming, changing and so many other important things. Investing in a family is something that is done with the risk of losing it all as with many investments. If one uses a good investment strategy and tactics however, this can lower the risk of both financial and other investments in and for family.

Family investing is a good thing, but it is important to keep in mind to successfully invest in family takes resources that one may or may not have or be willing to sacrifice. With a willingness to invest and invest wisely one can start by investing a little and then with time investing more for potentially greater returns.