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3 Ways to optimise your investments

ways to optimise your investments
Image by Nattanan Kanchanaprat from Pixabay

Investing is key for building your wealth effectively. However, this isn’t always easy to carry out in the most efficient way for your finances.

That being said, there are various things you can do to optimise your investments and ensure they’re primed to produce the best financial outcome for you.

In this article, you’ll learn three of the best ways to optimise your investments and use them to grow your wealth efficiently for the future

Read on to find out more.

Consult with a modern wealth manager

The first, and potentially most beneficial way to optimise your investments, is to seek advice from a modern wealth manager. Your expert adviser will be able to not only guide you on the best way to structure your investments but also ensure they’re best suited to your financial needs.

For instance, with Netwealth wealth management services, you receive tailored advice for your specific financial circumstance. Your adviser will learn of your individual goals, as well as any concerns or challenges you might be facing.

This way, they can offer advice that’s unique to you, so you can invest your money with the right level of risk and potential return.

The more accurately tailored the advice is to you, the more efficiently you’ll be able to build your wealth, and make the most of every investment opportunity.

This is why, in any financial situation, advice from your modern wealth manager is vital.

Structure your pension contributions more effectively

Another great way to optimise your investments, is to ensure you’re creating the best structure for your pension contributions.

Investing in your pension enables you to grow your savings for retirement, whilst still being able to shelter your money from tax. This is due to the specific tax rules that apply to pensions.

As with anything, your adviser should be a crucial component in your approach to pension contributions, as they can help you best navigate the tax rules and make the most of all your available allowances.

As of the current tax year, 2022/2023, there are two main allowances you should be aware of when investing in your pension:

The annual pension allowance – £40,000 – is the total amount you’re able to contribute to your pension pot each tax year, whilst still remaining sheltered from tax.

The lifetime pension allowance – £1,073,100 – is the total amount you’re able to contribute to your pension pot across your lifetime, whilst still being sheltered from tax.

On top of this, any gains made from your pension savings will be exempt from Capital Gains Tax (CGT), which is something you can discuss with your adviser to further optimise your tax-efficient investments.

Take advantage of the ISA tax rules

You can also optimise your investments by making tax-efficient savings in individual savings accounts (ISAs).

ISAs allow you to save a certain amount of money each tax year and shelter it from any potential tax charges. As of the current year, the annual ISA allowance is £20,000.

There are four types of ISAs – cash ISAs, stocks and shares ISAs, lifetime ISAs, innovative finance ISAs.

Diversifying your ISA investments can also help you further optimise your wealth growth. For instance, with a stocks and shares ISA, you won’t be charged any CGT on the gains made from your successful investments.

Be sure to consult with your adviser to see how you can best approach ISA investments, to grow your finances in the most tax-efficient way possible.

Please note, the value of your investments can go down as well as up.

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