Start with your net worth                                                                                          

Create a personal balance sheet totally your assets and liabilities. The difference is your net worth. The idea being, if you were to sell everything you own and paid off everything you owe the amount left over is how much you are worth. This is an essential starting point for a sound financial plan as it establishes where you are financially. It also identifies opportunities on how to improve your worth. You could target to pay off your liabilities sooner and/or invest in assets that grow better. 

Preserve your capital                                                                                                

2019 will start with markets trading at dizzy heights shrouded in a cloud of uncertainty. If you lose 50% of your capital you need 100% return to get it back. Your investment should be positioned to preserve capital. 

Seek certainty                                                                                                                

Of all the asset classes to invest in cash is king. Equities have under performed in all sectors for the last few years. Property in all sectors too has under performed. This isn’t surprising as our economy has weakened and interest rates have risen in the past few years. Certainty is found in the current interest rate cycle which has trended upwards over the past few years creating opportunity to find returns of up to 8% in the money market.

Don’t ignore debt                                                                                                           

As interest rates move upwards so does the cost of debt. It stands to reason that the sooner debt is paid off the more one saves. The direct return is the percentage of interest being charged. So, paying off a credit card at 22% saves you that amount immediately. This is much more certain than trying to find an investment that will guarantee you the same return.