Our stock market is unsteady and the latest turn in the financial markets has summon some rather nasty thoughts, back to the days of a miserable and gloomy economy.
At this very moment the financial market is pretty vague and if you are banking on the stock prices changing you could end up in desperate tears over the losses, let alone any of the gains you have gathered in your portfolio, over the years.
The summarize here are 8 points you should consider to hedge your familys finances, their future, and please do not rely solely on your 401K to help you through a hard time:
1.Depending your current financial situation, you should be saving 30-35% of your income into an interest bearing accounts fro example a bank savings account or credit union CD's. Here s why, you can get a rapid return over a shorter period at a elevated interest rate, without taking any more risk. When they the period has matured, simply transfer these funds into different high interest bearing CD and simply continue to reinvest the original amount and all of the interest you earned. The secret is to grow the CD to a optimal size so that you can split them into 2 CD's, keep investing the funds and simply observe the rapid growth due to the power of compounding interest, i.e. without taking any material risks. This will allow you to move the funds into the stock market when the time is right or once you have done your home work identifying potentially good stocks.
2. Consider moving a percentage of your 401K into an Roth IRA " the point is not to take all your money out of the 401K but rather just a portion of your employer sponsored 401K plan especially if your employer has a matching contribution to your 401K. Your employers contribution is free money for you to grow your 401K, so you do not want to lose that income stream.
3. Determine your level of risk and the return you are seeking, remember Bonds still remain one of the safest investment options. One of the critical errors we have seen folks make is not changing their portfolio to addressing their lifestyle, close to retirement.
4. One of the worse mistakes is having a substantial amount of debts before you retire. There is no worse feeling than realizing you at your retirement age, and now you have to hunt for another job just to be able to payoff your debt. There you are standing next to some kid young enough to be your grandchild and having to call him/her boss. That is not a anyones idea of a good retirement.
5. Have the ability to become mortgage free while at an early age. Use the latest mortgage acceleration strategies available to you and become debt free faster so that you can pay off your mortgage 15 years faster without changing your lifestyle or paying extra towards your mortgage.
6. By creating an emergency reserve in a separate financial company or bank, which is not linked to your current bank account, will allow you to avoid little withdrawals that will eat up your emergency funds.
7. When considering your insurance costs, a great idea is to have your home insured at the replacement value, not market value of the home. The same principle will apply for your car. You do not have want to have your car insured at the minimum state value when you reside in a better district or neighborhood. The idea is to have a better insurance coverage for your lifestyle and you may want to possibility of having umbrella coverage to reduce your insurance cost.
8. Getting sick or injuring, yourself could deplete your savings or 401K if you do not have proper Health insurance. Just to elaborate, imagine slipping in the bathroom or injuring your knees. Therefore, you know that you could pay in the region of $6,000 just for the surgery and well over for doctors visits. Which is ridiculous.
The key is to protect yourself and your family in retirement. To be successful and achieve your goals you can set a timeline to address each of the points above, measure, and ensure you are actively taking the right steps to protect yourself. - 15224
At this very moment the financial market is pretty vague and if you are banking on the stock prices changing you could end up in desperate tears over the losses, let alone any of the gains you have gathered in your portfolio, over the years.
The summarize here are 8 points you should consider to hedge your familys finances, their future, and please do not rely solely on your 401K to help you through a hard time:
1.Depending your current financial situation, you should be saving 30-35% of your income into an interest bearing accounts fro example a bank savings account or credit union CD's. Here s why, you can get a rapid return over a shorter period at a elevated interest rate, without taking any more risk. When they the period has matured, simply transfer these funds into different high interest bearing CD and simply continue to reinvest the original amount and all of the interest you earned. The secret is to grow the CD to a optimal size so that you can split them into 2 CD's, keep investing the funds and simply observe the rapid growth due to the power of compounding interest, i.e. without taking any material risks. This will allow you to move the funds into the stock market when the time is right or once you have done your home work identifying potentially good stocks.
2. Consider moving a percentage of your 401K into an Roth IRA " the point is not to take all your money out of the 401K but rather just a portion of your employer sponsored 401K plan especially if your employer has a matching contribution to your 401K. Your employers contribution is free money for you to grow your 401K, so you do not want to lose that income stream.
3. Determine your level of risk and the return you are seeking, remember Bonds still remain one of the safest investment options. One of the critical errors we have seen folks make is not changing their portfolio to addressing their lifestyle, close to retirement.
4. One of the worse mistakes is having a substantial amount of debts before you retire. There is no worse feeling than realizing you at your retirement age, and now you have to hunt for another job just to be able to payoff your debt. There you are standing next to some kid young enough to be your grandchild and having to call him/her boss. That is not a anyones idea of a good retirement.
5. Have the ability to become mortgage free while at an early age. Use the latest mortgage acceleration strategies available to you and become debt free faster so that you can pay off your mortgage 15 years faster without changing your lifestyle or paying extra towards your mortgage.
6. By creating an emergency reserve in a separate financial company or bank, which is not linked to your current bank account, will allow you to avoid little withdrawals that will eat up your emergency funds.
7. When considering your insurance costs, a great idea is to have your home insured at the replacement value, not market value of the home. The same principle will apply for your car. You do not have want to have your car insured at the minimum state value when you reside in a better district or neighborhood. The idea is to have a better insurance coverage for your lifestyle and you may want to possibility of having umbrella coverage to reduce your insurance cost.
8. Getting sick or injuring, yourself could deplete your savings or 401K if you do not have proper Health insurance. Just to elaborate, imagine slipping in the bathroom or injuring your knees. Therefore, you know that you could pay in the region of $6,000 just for the surgery and well over for doctors visits. Which is ridiculous.
The key is to protect yourself and your family in retirement. To be successful and achieve your goals you can set a timeline to address each of the points above, measure, and ensure you are actively taking the right steps to protect yourself. - 15224
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