4 Essential Steps to Creating a Killer Investment Plan

By Mashum Mollah

September 1, 2021

investment plan

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There’s an old gem of wisdom about not letting your money just sit there but instead making it work for you. However, that is easier said than done, especially for those new to the investment game. Many successful entrepreneurs get stuck after a couple of years when they break even and finally start making a profit with a suitable investment plan.

They’ve already put some money back into their business and achieved a bit of growth, but they aren’t sure how to branch out into new things and get money flowing in from different sources. 

4 Essential Steps For Investment Planning

Well, investing is a smart move, but the first step is developing an investment plan. That way, you can avoid the common pitfalls overly eager but inexperienced investors run into and gain true financial freedom.

Here are a few crucial steps you need to take when coming up with your investment plan.  

1. Start Out Slow, And Explore Safe Investments

1. Start Out Slow, And Explore Safe Investments

If you’re just starting as an investor, you can take a page right out of Warren Buffet’s book and invest in S&P 500 companies and hold on to those stocks for dear life. These are big, well-established companies that have been around and will continue to earn good money for years to come, even if the value of their stocks fluctuates over time.

It’s a long-haul strategy and the investment plan, best suited for things like retirement savings, and Buffet suggests putting at least about 10% of your investment funds into US bonds as well. If you also dabble in foreign stocks, it’s a two- or three-fund portfolio and lets you focus on finding high-performing companies and learning how to spot safe investments.

It also teaches you a thing or two about patience and discipline, which all new investors need to work on.

2. Get Your Hands On Some Good Market Research

2. Get Your Hands On Some Good Market Research

Whether you’re going for a low-risk strategy as we’ve outlined above or want to go with more dynamic options that carry more risk but offer a higher reward in a shorter time frame, you’ll need to understand the market. Seasoned investors and day traders have spent years learning how to spot market trends for the investment plan. They analyze which software to use and when to make the right moves.

It’s not something you can learn overnight, but you can glean some great insights through professional market research. Don’t take my word for it, though – according to the leaders in macroeconomic research from, you need to understand the latest in US policy as well, and you can only get that through. The weekly recaps are designed specifically for a client’s individual portfolios and interest lists.

It’s a highly complex world out there, and lots of different factors can affect the market movements, so it pays to do your homework searching for a good investment plan.

3. Come Up With A Reasonable Investment Budget

3. Come Up With A Reasonable Investment Budget

Very few successful business owners got to where they are by throwing caution to the wind and risking it all—quitting a steady job right then and there, severing all ties to their former life, and spending every last cent on their ingenious business idea. Most people who do that and have nothing to fall back on often crash and burn within a year or two.

In the same vein, you don’t just take all the money out of your bank accounts, sell the car, take out a bank loan and use all those funds to start making a killing on the stock market. That would be a recipe for disaster.

How much you should set aside for investments depends on various factors. However, a good rule of thumb is to take the money you have left after covering monthly bills, company overhead, and living costs and put two-thirds or at least half of it in a savings account and use a third or up to half as your monthly investment plan and budget.

That way, you have some emergency money, and you never risk losing more than you can afford to lose, or you simply won’t panic and make any hasty moves.  

4. Set Clear Goals And Timeframes

The fastest way to sabotage yourself is to copy-paste a generic investment plan that doesn’t fit your goals and needs. You need to be clear about why you are investing – what kind of return are you expecting, when will you need the extra money, and how much risk do you find acceptable?

Saving up for a new car or a bathroom remodeling is a different game than building up a college fund for your kids or securing a retirement nest egg.

With long-term plans, you may be able to take more short-term risk, even wait for a decade to weather entire recessions or prominent oscillations in the market. However, if you’re looking at a purchase one or two years down the road, you will be much more risk-averse.

A Few Parting Words

There is no 100% bulletproof investment, but with a bit of research and patience, you can come up with an investment plan that works great for your needs, be they short- or long-term. Remember, take it slow, learn about the market, and diversify to minimize risk. 

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