Personal Finance

How to have a financially prosperous 2024

cash

Financial growth can only be achieved by exerting prudence in managing personal finances. FILE PHOTO | NMG

With the new year comes goal-setting and resolutions where financial resolutions feature on the majority of the lists. Financial growth, however, can only be achieved by exerting prudence in managing personal finances.

Obviously, there are several external elements like inflation, high cost of food and fuel among other ailments that we carried forward from 2023, but with a clear investment strategy, you can achieve financial growth in 2024. The dynamic investment landscape beckons with as many opportunities as challenges. Navigating the financial markets requires a strategic approach and an understanding of the current economic climate.

Firstly, aim to build a diversified portfolio. Diversifying your investment portfolio remains a fundamental principle for risk management. The key is to have investments that have a negative correlation. Spread your investments across different asset classes.

For instance, you could mix cash investments such as treasury bills with illiquid investments like real estate. This approach helps mitigate risks associated with the volatility of individual markets.

In the fast-paced world of finance, staying informed is crucial. Keep a close eye on global economic trends, geopolitical events, and industry-specific developments. Subscribe to reliable financial news sources and follow market analysts and finfluencers to make informed decisions.

Consume healthy information from reliable sources but remember to conduct proper due diligence before committing your cash.

In 2024, technology continues to drive significant changes in various industries. As a result, consider investing in innovative sectors such as artificial intelligence, renewable energy, biotechnology among other viable modern concepts.

Read: Managing your money in 2022

Companies at the forefront of technological advancements often present growth opportunities for investors. Additionally, the importance of sustainable and socially responsible investing is on the rise.

Evaluate companies based on their ESG practices to align your investments with ethical and environmental values. Many investors now prioritise businesses that demonstrate a commitment to sustainability and social responsibility.

Somewhere within the year, you will celebrate your birthday, if you haven’t already. This will take you one year closer to the retirement age and serves as a reminder for you to assess the trajectory of your pension savings. Ask questions like: “if I continue saving this amount at this growth rate for the years left until my retirement, can I afford to retire comfortably?” If additional monthly contributions put you in a squeeze, you could boost the retirement kitty with your annual performance bonus as extra security for your future.

As long as its value is protected from erosion by inflation, cash is still king in 2024. Include a substantial amount in your portfolio which is besides your emergency fund. The cash allows you to quickly take advantage of opportunities that may arise. For instance, you have analysed a certain stock and determined the perfect entry price which is yet.

Read: What tricks can I use to save a lot of money this year?

Holding cash will ensure that you don’t miss out on the entry. Yet, instead of using a home bank or a zero-interest account, a money market fund is ideal. These funds invest in short-term, high-quality, low-risk securities, making them a safer option for preserving capital. Their high liquidity and relatively exceptional returns making investment experience.

Mr Mzenge is the Manager of Enwealth Capital Limited.