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Financial Adviser | Investment advice for a hard worker

Published:Friday | September 30, 2016 | 12:00 AMOran Hall

QUESTION: I am a hard-working individual who is seeking advice to go into investing. I have been interested in investing from an early age, but I grew up poor, so I did not have the funds to start. However, I have now saved up a portion and want to get started. At the moment, I have in excess of $100,000 that I am not using now, which I want to invest and reinvest. Could you assist me with options that could give me a good turnover please? I am 27 years old, and I am looking to start a family and acquire a house, so, at the moment, I work seven days a week to be able to start this.


FINANCIAL ADVISER: You are on the right path in many ways, but reaping real meaningful gains from your investments could take some time. Investing requires consistency, good risk management and fixity of purpose.

Here is what I like about your approach: You have saved first, the funds you intend to invest are not funds you want to use now, you want to reinvest your gains, you are prepared to examine several investment options, you have identified some goals, and you want to start at a relatively young age.

You should not allow the relatively small sum that you have saved to deter you, and although I believe in hard work, I suggest that you do not push yourself too much. It is important that you take care of your health, so you should get adequate rest.

I can understand why you would want your investments to give a good turnover, that is, you want a good yield from your investment portfolio. I deliberately referred to an investment portfolio because it is important to invest in more than one type of instrument or in one instrument.

Diversification, as this is called, is an important way to reduce risk. This approach will not give you the same returns as the highest-yielding instruments or the same as the lowest-yielding instruments, but it can still yield very good results depending on the proportion of your funds invested in the better-performing instruments.

For a young person just starting to invest with a limited pool of funds and limited knowledge of investment issues, I would not recommend that you take a high-risk posture and that you go for an approach that allows you to diversify effectively. It seems to me, too, that you would be better off allowing persons with investment expertise to manage the investments, at least initially.

Later, with more knowledge and resources, you may want to make more of the decisions yourself and take more risks to improve your chances of getting higher returns, but you should note that this approach could also result in lower returns.

The instrument that best fits into what I said above is the unit trust. There are so many different types in the Jamaican market today, and they allow a fairly wide range of options. I suggest you check the Yellow Pages for help in making contact with them.

I am not promising that you will make lots of money tomorrow, but you can build up a fair amount of wealth over time with the right approach. I will be among the first to admit that the path to wealth creation and accumulation can be challenging, particularly for young persons like yourself, but the situation is not hopeless.

You have not said that you have a job, but I believe you do. If you improve your skills, you should be able to earn more and have more to invest or even start a business later.

You have made some good steps. Do some research now and take action.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email