Investing is something that puts many people off. You’re making a bet that something will do well over time. If you make the wrong choice, you’ll lose your money.

And when 75% of people believe they don’t have enough personal finance knowledge, it makes investing uncomfortable for many people.

If you’re interested in learning how to create a great investment portfolio, look no further. Below are four tips that will help when building an investment portfolio.

1. Define Your Goals

Defining your goals is the first step to starting an investment portfolio that works for you. For most people, this means deciding when they want to retire and how much cash they need to live comfortably.

However, you may want to take chances in the meantime that are higher risk and offer greater returns. You may want to commit a portion of your investment money to these strategies if you’re younger and can take more risks.

This information will help you determine how much money to invest every month and for how long.

2. Determine Your Asset Allocation

The next step to finding the best investments is determining which assets you want to buy. Most people will stick with traditional stocks using index funds and a 401k. This is great for slowly building wealth and retiring.

However, it’s also a good idea to diversify your risk. You can use real estate, P2P lending, commodities, and other investment vehicles.

There are also risky investments like cryptocurrency if you don’t mind losing your investment. Of course, you’ll need to learn more about these strategies and how to pull out your money when you make a profit. Click for more information about withdrawing your Bitcoin holdings.

3. Manage Taxes

One thing you shouldn’t overlook when investing is taxes. If you invest with post-tax money, you may be stuck paying taxes again once you start withdrawing your profit. If you want to avoid that, choose your investment accounts carefully.

Take an IRA, for instance. You can work with your employer to deposit pre-tax money into an IRA. You have a maximum contribution every year for doing this.

This will help you save on taxes by withdrawing your money later when you don’t make as much every year. Look for accounts like these to optimize your tax burden.

4. Monitor Everything Carefully

While it is true that many investments are mostly passive, that doesn’t mean you should just sit back and not do anything. This is especially true if you want to maintain an asset allocation percentage. Your assets will drift over time, so you must allocate more investment money to different asset classes.

However, you don’t need to do this all the time. It’s usually enough to look over things once or twice per year. Doing this will give you enough information to change your investment portfolio as needed.

Start Your Investment Portfolio Today

It isn’t enough to keep money in a savings account. Inflation increases every year, which means the money you have today won’t be able to buy as much in the future.

That’s why it’s critical to create an investment portfolio that increases your net worth over time and outpaces the inflation rate. Use the investment portfolio advice above to find investments that work for you and your financial goals.

Check out the blog to find more great tips.