Lifestage Investment Mix

As we grow throughout life, our financial circumstances change. This change should be reflected in our investment mix, where the proportions of assets we hold in our investment portfolio should evolve. 

​When we are younger we have the benefit of time and can therefore take more risk with our investment. As we grow older and towards retirement, we may want to take less risks and  invest in assets that provide stable monthly incomes.

​Here I present different stories of women- Dali (21), Miriam (29), Bisi (43) and Nana (41), their financial goals and investment portfolio. In summary and regardless of your life stage your investment portfolio should be:
  • Be Diversified across and within asset classes
  • Have a mix of low, medium and high risk 
  • Change with your Lifestage
  • Vary in duration​ short, medium  and long term 
  • Reflect your goals
  • Grow your net worth
The examples shown in the pages are for demonstration purposes only. Do your research to find what fits your goals.
Explore some options to build an investment portfolio that fits your goals
Meet Dali,  she is 21 and in her second year of university. She has some student loans which she uses to finance and invest in her education. She has some part-time jobs but majority of her income is used to keep her afloat. She has about 50 to save per month and is keen to see how to make it grow.

Student, Dali, 21


Age
21

Income
quite limited 

Goals
Finish school
​Get an internship

Maximum amount I can save per month
40

Financial focus
My Investment mix
Dali has the benefit of time to grow her investments however small
Meet Miriam 29, She has been employed for 4+ years and is seeking a promotion within her company  in 14 months. She pays monthly into her company pension which matches her investments. She also has around 300 to save each month after expenses. She wants to build her emergency fund and is interested to aggressively growing her wealth in the next 10 years. Oh, she is planning to purchase a home too.
​

Early Professional, Miriam, 29

Age
29

Income
Stable & growing

Goals (Adulting is beginning)
  • ​Advance in my career 
  • Travel

Maximum amount I can save per month
175

Financial focus
  • Start paying off student loan
  • Start saving into my pension
  • ​Start house deposit
  • Set-up emergency fund
  • Build a good credit history
  • Invest in financial literacy

My Investment mix
Miriam has increased savings with which she can use to diversify her investments
  • Use ISAs to boost your emergency fund
  • Use government schemes to add to your pension portfolio
  • Invest in stocks, mutual funds and ETFs
  • Start saving into your pension ( use company pension matching schemes- if available)
  • Diversify your investment portfolio 
Meet Bisi 46, She is the head of marketing at a media enterprise. She has purchased a home which she is paying a morgage towards.  Bisi wants to retire in 19 years at age 65 and wants to makes sure that her existing lifestyle does not reduce. She invested in stocks market since she was 28 and is looking at moving rebalancing her investment portfolio to contain more low risk income generating assets.

Professional, Bisi, 46

Age
46

Income
Robust

Goals 
  • Travel to Zanzibar
  • Start Yoga

Maximum amount I can save per month
400

Financial focus
My Investment mix
Bisi wants to plan for retirement  she rebalances her portfolio by reducing her investment in stocks/shares/funs and focuses building pension and bond assets. 
  • Increase contribution to state and company pension. 
  • Increase payments to personal savings pension plan
  • Increase your investments into assets that produce a steady income
  • Shelter cash using ISAs for tax efficiency
  • Reduce investments in stocks, mutual funds and ETFs
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Meet Nana 41, She is a mother of two children ages 2 and 7. Nana works as an Office Administrator and is currently focused on creating financial assets for her children. Until today, Nana's core assets were cash and company pension. In 10 years, Nana wants to buy a property which she can own by retirement age.

Mother, Office Administrator, Nana, 41

 Age
41

Income
Comfortable

Goals 
  • Go on vacation
  • Spend more time with her children
  • ​Buy a house

Maximum amount I can save per month
275

Financial focus
  • Reach her emergency fund goal
  • Set-up investments for her children
  • Have good health insurance
  • Continue to invest in life insurance
  • Invest in financial literacy
  • Tax efficiency across investment portfolio

My Investment mix
Nana's income covers herself and her children. She has her own personal goals which is related to creating a solid investment portfolio that sets her up for retirement, supports her goals to purchase a home whilst use cash to meet everyday needs.  At 41, Nana still benefits from diversifying her investments. She uses Bonds, P2P to get monthly income, she  uses H2B ISA or LISA for her property investment and she uses Stocks, Funds and PE for long term investments. 

In addition, Nana wants to set up a strong portfolio for her children so when they become adults they will have financial assets which they can build upon.

Knowing that her children are young and have the benefit of time to let their investment grow, Nana uses two products to hold her children's assets
  • Junior ISA (Cash, Stocks & Shares): is a savings account that allows parents to save up to a certain amount annually for their children tax free. Once a parent opens a Junior ISA, they cannot take the money out. The savings can only be accessed by the child at age 18 and there is no restriction to what the child can do with the investment. Like the Adult ISA, the Junior ISA can be held in a cash ISA and/or Stocks & Shares ISA. Junior Cash ISA can be opened from £1. Check your brokerage account in order to invest in a Stocks & Shares ISA. The interest rates on Junior ISA are relatively higher than typically retail banks.
  • Junior SIPP: is a personal pension plan that parents can use to set up a pension for their children. The money invested in the Junior SIPP can only be accessed at around age 55. For each amount invested into a Junior SIPP, the UK government provides a tax relief of 20%

For Nana
  • Continue to top up your emergency fund
  • Contribution to state and company pension. 
  • Increase payments to personal savings pension plan
  • Increase your investments into assets that produce a steady income
  • Shelter cash using ISAs for tax efficiency
  • Use investments in stocks, mutual funds and ETFs as long term investments
  • Continue to invest in life insurance to provide cover for your family incase the unexpected happens
For her children
  • Open a Junior ISA (Cash and/or Stocks & Shares) for each child and set up a direct debit where you put in a monthly amount
  • Open a Junior SIPP for each and set up a direct debit where you put in a monthly amount
  • Start teaching your children about financial literacy 
Disclaimer
The content on WealthSquats are my own thoughts. Consult certified financial experts to get information that is suitable to you.
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