As a business owner and entrepreneur, you will presumably be aware that one of the core principles of building wealth is to have multiple streams of income. If you have ever had any professional financial planning done or had advice from financial advisors, no doubt they too will have told you that the more streams of income you have, the more secure your financial position will be.

As for what those income streams of income should be, in truth that is up to you and will be influenced by the time you have available, how much additional income you wish to earn, and even what income sources interest you. You may seek advice on the matter and if you speak to a financial advisor they will undoubtedly discuss with you investments being a solid income source.

Often when entrepreneurs or even ordinary citizens hear the term “investments” they believe it to be a risky route to follow. That is understandable given the stories you hear of people losing fortunes due to bad investments. As any financial advisor will tell you, thankfully, these scenarios are the exception rather than the rule with most investments being a safe and secure way of increasing your wealth. However, that comes with a caveat.

The caveat is that investing does need some careful thought and consideration, and just randomly investing your wealth with no rhyme or reason is a recipe for disaster. You can also take steps to ensure that your risk is minimised and if you read on we have outlined seven tactics that all investors should be aware of as they can ensure any money they invest is safe.

Tactic #1 – Determine Your Risk Tolerance: First, determine what level of risk you are willing to accept. If you are happy to take big risks, returns should be higher but bear in mind they could be volatile and could ultimately fail altogether. Alternately, higher risk aversion means lower returns but safer investments.

Tactic #2 – Maintain Sufficient Liquidity: It is poor financial planning to tie up all your liquid assets in investments. Financial emergencies can occur when you need quick access to funds so ensure you retain an emergency fund and that some of your investments can be cashed in quickly.

Tactic #3 – Invest In Multiple Asset Classes: Your financial advisor will explain to you that investing everything within one type of asset class is a mistake. In other words do not invest in just property, or just equities or just gold. Invest in multiple asset classes as this reduces your risk if one asset class falters.

Tactic #4 – Have A Diverse Investment Portfolio: In a similar vein to the previous point is the tactic of having a diverse investment portfolio. In addition to investing in different asset classes, within each class, you should diversify the specific company shares, property markets or invest funds, for example.

Tactic #5 – Complete Due Diligence For Every Investment: We are sure as a business owner you do not make decisions on a whim and weigh each one up, and that same principle applies to investing. Always carry out due diligence on each investment you may make to ensure you are investing with minimal risk.

Tactic #6 – If You Are Risk-Averse, Invest In Blue Chip Stock: If you are extremely risk-averse and want a near cast-iron guarantee your money is safe, you should invest in blue-chip stock. These are the rock-solid household name companies and national and international brands that have been around for years.

Tactic #7 – Monitor Your Investments Performance Diligently: Any decent financial advisor will tell you that you can reduce your risk if you carefully monitor your investments. If you are unsure how they can help you with investment planning and arrange for subsequent reviews based on your portfolio’s performance.