There are four phases in the life cycle of an Investor and it helps them to reap benefits over time equally. These four phases of individual investor life Cycle can be defined as follows.
1. Accumulation phase:::::::::::::::: Individuals who are in their early careers are in the accumulation phase. These careers can be early to middle years. Thus they should focus on investing as little money as they have. This is because the same amount of money will give them better return in the future. For this reason, an investor in this phase should focus on investing as little as they have.
This is because it will accumulate to more money on the future. For example, if an investor invests $500 per year for 20 years, it can accumulate to $50,000 in the future. But if he decides to invest early, it can easily accumulate to more than thatand that can be a total of $150,000 if they have 40 years time.
2. Consolidation Phase:::::::::::In this phase of investment, an investors earning exceeds their investment. This is because in this phase it is assumed that main investor has already paid off his/her outstanding debts and much of their college bills. Thus they have extra income which they can use to invest in higher risks product. But they still needs funds and because of this they may not invest in high risk products that may put themselves in a loss. It is one of the Major phase of Individual Investor Life Cycle.
3. Spending phase::::::::::::::::::This phase shows up when an individual retire and their expenses is covered by their pensions of some savings fund. Thus in this phase an individual can take decision to invest in high risk projects.
4. Gifting phase::::::::::::::: In this phase an investor can gift from their earnings to others because they are already rich and settled.
There are four phases in the life cycle of an Investor and it helps them to reap benefits over time equally. These four phases can be defined as follows.
1. Accumulation phase:::::::::::::::: Individuals who are in their early careers are in the accumulation phase. These careers can be early to middle years. Thus they should focus on investing as little money as they have. This is because the same amount of money will give them better return in the future. For this reason, an investor in this phase should focuss on investing as little as they have.
This is because it will accumulate to more money on the future. For example, if an investor invests $500 per year for 20 years, it can accumulate to $50,000min the future. But if he decides to invest early, it can easily accumulate tomore than that mand that can be a total of $150,000 if they have 40 years time.
2. Consolidation Phase:::::::::::In this phase of investment, an investors earning exceeds their investment. This is because in this phase it is assumed that main investor has already paid off his/her outstanding debts and much of their college bills. Thus they have extra income which they can use to invest in higher risks product. But they still needs funds and because of this they may not invest in high risk products that may put themselves in a loss.
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