Posted at January 27, 2023 Posted In Blog, Financial Freedom, Inflation, Passive Income, Taxes

When setting and adjusting financial goals this year, be sure to include a plan for where your next investment is going to be placed, and how it will benefit you. One of the best ways to create an investment strategy is to calculate the risk and reward for each dollar you are spending. It is common for investors to only consider the return on investment (ROI) – or how much money you have made after accounting for the cost of the initial investment. However, there are more factors to consider when putting together your financial plan. Calculating ROI is important, but what you are personally benefiting from each investment is equally important. There are many ways to be sure you get the most out of your time and money with each investment opportunity.

Payback period: The amount of time it takes you to recover the cost of your investment is important. The faster you get your money back, the faster you can do with it as you please.

Appreciation: Evaluate the value and useful life of the asset you are purchasing. Over time, the asset could be sold for more than it was purchased.

Depreciation: Consider the type of asset you are investing in – you may be able to recover the cost of your initial investment through tax deductions.

Risk profile: Analyze the cash flow options and tax code benefits available. With the right strategy, you can quickly decrease the amount of money at risk while still receiving the maximum return on your investment.

Time recovery: Active income will require a lot more time from you. Your time is valuable and better spent doing things you enjoy. Investing for passive income increases cash flow without increasing your time commitment.

Considering all the factors in each investment will ensure that you are receiving personal value and a financial return. You deserve both! If your specific goals cannot be met by your current investment options, it may be time to look for new opportunities. There are investment strategies that apply to all different kinds of lifestyle goals.

At RAIT, we specialize in finding opportunities to support the needs, wants, and desires that propel you towards the lifestyle you are trying to achieve. If you need help finding the right investments for your future, please give us a call. We can help you find the right investment opportunities to maximize your personal and financial return.

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