Despite popular belief, investing in the Stockmarket does not have to involve high risk, extortionate commissions and fees, punitive restrictions, specialised knowledge or even much effort on your part. There are many different ways to invest your hard earned money to create wealth. Some routes involve higher risk than others.

Depending on your objectives, your aim should be to choose the lowest risk route for your investments.

The ideal conditions to make your investments worthwhile would depend on your individual circumstances but there are general conditions that most people expect. Usually these are:

1. High return

2. Minimal Risk

3. Low Maintenance

4. Low Fees and Commissions

5. Easy Access

6. Maximum Flexibility

7. Tax Efficiency

Refer to part one and two for previous discussion on High Return, Minimal Risk, Low Maintenance, Fees and Commissions and easy access.

Maximum Flexibility

The best strategy for investing is to invest a percentage of your income on a regular basis, usually monthly. Choosing to invest a minimum of a tenth of your income is a voluntary decision. Hence, it seems meaningless to enter into rigid agreements or contracts that commit you to forced regular savings!

It is important that your investment is responsive to your needs. Your aim is to maintain control of your own money as much as possible and have flexible access to it at all times without penalties. You should be able to transfer your investments if you are not completely satisfied with your initial choice, again without unreasonable charges.

Always retain the control, initiative and decision-making on your own money. It is easy to set up your investments yourself. It is faster and involves less paperwork than delegating it to an advisor who may be limited in the choice of financial products his company offers, or unduly influenced by more profitable commissions relating to particular investments, which may not necessarily be in your favour.

The last thing you want is to hand your valuably earned money to someone else and the control that goes with it. Investing can be simple, and you will learn a lot as you go on. Find your self a mentor or a wealth coach who knows about investing in the Stockmarket, read a lot and take control of your money. It is easier, it is faster and you will be guaranteed to choose your ideal investment.

Tax Efficiency

You cannot avoid paying tax on the returns of your investment, but you can minimise the effects of tax on your investments. Usually, the money you save and invest has already been taxed at source, which means you have already paid tax on it as part of your salary.

Once your savings are invested, you will pay little or no tax for many years. This is great and will allow your investment to grow without undue drawbacks. When you finally come to draw funds out of your investment, you could be liable to capital gains tax and/or income tax.

In the beginning, you do not need to concern yourself overly about tax implications until your fund has reached a significant amount. There are legal strategies to minimise tax effects on your investments. When necessary, find a good tax advisor before withdrawing your investments. You can also read about it yourself.

If you live in the UK, depending on how much you have available to invest within one tax year, you can invest the first (currently) 7,000 into an ISA (Individual Savings Account) to take full advantage of the tax benefits. Beware, though, of any tax-deductible schemes with associated high charges. These charges, effectively wipe out the tax benefits of the scheme. Find a favourable tax environment for your money that has no additional charges.

Follow these guidelines and you are in for a winner!

Copyright 2006 Margaret Ntifo