Personal Finance Tips

[jIM_Ohio]

On the other hand, lots of people discovered that target funds are not the "set it and forget it" vehicles that they may have thought. During the market meltdown, some of those target funds lost 30-40% of their value for folks who were at or close to retirement. Those funds were too heavily weighted in equities close to the target date. Since then, I believe they have all reallocated their portfolios and gotten a bit more conservative.

Most studies I have read suggest "slamming on brakes" is better than gradually reducing allocation.

Generally a person would have recovered 2008 losses by 2012 and 2013 for certain. So a 5 year "warning" is proper, so gradually going from 15 year equity position to 5 year position does not accomplish much and might actually hurt...

[johnt78]

If you want to make sure that all of your hard-earned money doesn't vanish, you'll need to take steps to protect it. If you rent, get renter's insurance to protect the contents of your place from events like burglary or fire.It's important to understand how income taxes work even before you get your first paycheck. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations.

[johnt78]

Financial position is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.

[bigdaddybus]

I know people that are very successful in the market, they have solid investing strategies, they have exit strategies to limit losses, they do a lot of things to make their clients money. What they don't do is work with lower wealth or lower income people. They focus on the top 5% of the food chain. That doesn't help the other 95%.

I agree it would be great if we could get people proactive in their money, but the truth of it is that they don't. They are scared, they are intimidated, they get a lot and I mean a lot of advice from people that are everything but interested in what is best for the consumer and these financial pros are largely protected by the governing bodies that have the rules set up to protect the company, their representatives and not the consumer.

^^^agree 100%

I am 40, my dad is 66 and retired. I have watched him make money hand over fist for years crushing the market averages and building a portfolio way over the Estate Tax Exemption of $5.3 million with an career making under $100K a year.

But you have to be proactive with your money. Here are things my dad always tells me.

1. It takes money to make money (invest as much as you can)
2. Dont be gready, bank a big gain and reinvest in something else you have researched
3. Use debt to your advantage (he has a $700K mortgage that he can pay off today, but he would rather invest the $700K and earn money larger gains from it rather than pay off a 3-4% mortgage)
4. "I plan to live 30+ years in retirement, I keep the money I need in the next 5-7 years for expenses in fixed investments, the rest stays invested." (in equities). He says getting too conservative in retirement is silly because you may be retired as long as you worked.
5. Dont invest in anything you dont understand. Understand what they do and where they are going (or want to go)
6. Dont be afraid to invest in speculative investments (5-10% of portfolio) as they can fail miserably or blow your mind with growth.
7. When he buys a stock and it doubles, he likes to sell off half to recover his investment (buying into something else) and let the profit run (if the fundamentals are still good)
8. Always have cash to buy when the opportunity comes
9. learn to read financial statements. Sites like Yahoo Finance just explode with info.
10. Sell losses, or as he calls it "Dont keep a Turd"
11. Buy appriciating assets (real estate, gold, art, etc)
12. Buy 1 yr old luxury cars and drive them for 10-12 years then get another one.
13. Give

I have learned alot from my dad about amassing wealth. Honestly, I wish I could get him to spend more of it now. I dont care if he leaves me a penny, I'd rather see him act more like Morgan Freeman in the movie "The Bucket List"

[Kundan Lal Rana]

Tuesday, June 1, 2010

Here is an seven step program to have as an financial plan, by Dave Ramsey.

1) Build an 1000k Emergency fund
2) Pay of all debts other than mortgage and large home equity loans.
3) Build Emergency fund to 3 to 6 months expenses.
4) Begin investing 15% of your income into Diversified stock mutual funds.
5) Any additional funds can fund college funds(529's).
6) Next, use any additional funds to pay down mortgage
7) Give. This can be done in parts after step three if you choose.

Great article maat! These are really great personal finance tips. First, When we think of investing, we just think putting money into a stock, ex-traded fund, mutual fund or in any bond. I think another investment we can make that will be helpful to our future earnings is investing in our own skills.
Second, we should never forget the rule of thumb "Income-Savings=Expenses"

[amigo1989]

KJackson, so what specific combination of vehicles do you use for your retirement? Do you have an IRA and 401k and only invest in fixed income securities or mutual funds? Do you invest in blue chip stocks? You mention various features of financial products and I'm wondering if you capture any of these features in your own portfolio.

[DashOption]

Thanks for sharing this tips it’s really helpful tips for finance

[Deepali Mohite]

Steps towards securing financial future

Everybody wants to live a good life and retire in peace without having any financial troubles, or having to depend on anybody. But in order to do that, you need to go about saving for your future. If you are a salaried individual and want to get a hold over your finances right at the beginning, this is just the thing you need to read.
- Begin with financial plan
- Get adequate insurance plan
- check your credit score.

[7Figures]

I have to start building my credit ASAP. Everything you said is correct sir! Thanks for sharing !!!

[Deepali Mohite]

Steps towards securing financial future

Hi, (7 figures)

If you haven't availed any credit before and it's the first time you are going to apply for a credit card then would advise you to start building a credit by getting a secured credit card. For this card, you do not need a credit score. You just need to keep a fixed deposit and a card is issued against it.