Keeping that New Year's plan to create wealth

By Stacy-Ann Smith

A MERE eight weeks into the New Year and many a resolution made with zeal and determination are in jeopardy of falling by the wayside. Traditionally, New Year's resolutions range from the rational to the incredible - from the ambitious but achievable commitments to lose 10 pounds and quit smoking, to the fantasy targets of becoming a billionaire by the end of the year.

Of course, there are the eternal optimists who will hasten to point to Facebook creator Mark Zuckerberg, who became the world's youngest billionaire at the tender age of 24, as proof that the incredible does, indeed, happen. But financial experts say, while it's not impossible to create a billion-dollar global business or come up with the winning lottery numbers, your attempts at wealth creation are better spent employing some good old-fashioned investment techniques.

Wealth creation

General manager of Capital & Credit Securities Limited (CCSL), Christopher Walker, notes that wealth creation depends to a great extent on the right attitude, good habits and the best technique. Walker says people often confuse saving and investing and this confusion can affect how fast you can achieve your goal.

"Persons tend to save believing that they're putting away funds that can make them wealthier. But the problem is, it doesn't happen because the right selection hasn't been made," Walker explains. Adding that investing should be focused, the Capital & Credit executive says it should also be based on a strategy that involves an instrument or instruments in which funds are placed for a specific period with the express purpose of creating wealth at some future date.

Pointing to the fact that investing, like many other activities, can be tailored to suit individual tastes and preferences, Walker says every potential investor must first determine his or her risk appetite. "Everyone is different as we know. I might be willing to take risks that you are not willing to take, so the first place to start is asking, 'Am I a risk-taker or am I a moderate person?" argues Walker.

Risk appetite

Once you determine your risk appetite, you should then try to align that assessment with the investment options that are available. These days, there's a wide range of options to suit every appetite. Walker encourages every potential investor to fully explore the options before making a commitment. "You could buy Government of Jamaica paper. You could go into a certificate of deposit, Treasury bills, and repurchase agreements," explains the CCSL general manager. These are fixed-income instruments that guarantee a certain payment at different points in time.

If you are a moderate investor, however, Walker recommends you take a close look at the stock market. For the investor who's not afraid and can afford to take risks, the options range from stocks to US-dollar investment instruments and the unit trust. "That (unit trust) provides an additional opportunity at this point in time where you can invest as part of a pool so you're not actually taking the risk as an individual.

The unit-trust market over the years has performed fairly well," he says. Walker points to the Capital & Credit Income and Growth Fund which has yielded over 300 per cent during the last 10 years, but insists that every investment decision should come only after a conversation with an expert. "If you walk into any Capital & Credit office on any day, there's an officer there willing to walk you through the options that are available, to speak to you about your own preferences and what your future goals and objectives are," disclosed Walker. It's the first step he recommends on your 2011 journey to financial fitness.

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